Ocado posts 12% sales growth

The online supermarket’s gross total sales, which includes VAT and marketing vouchers, rose 12% to £332.3m in the 24 weeks to May 13.

Revenue in the first half increased 11.4% to £308m while operating profit fell from £2.4m last year to £1.7m this year.

Net debt rose from £19.2m on November 27 to £71.3m on May 13.  

Ocado chief executive Tim Steiner said that forecasts for the third quarter would be difficult after the Diamond Jubilee celebrations disrupted deliveries and added that the Olympics is also likely to have an impact.

Ocado confirmed former Kingfisher and Fitness First finance director Duncan Tatton-Brown will become its new chief financial officer, starting on September 1. Richard Eact will continue to fulfill the role on an interim basis.

The etailer has expanded its range of groceries and non-food products by 10% over the 24 weeks to over 22,500. Average orders per week increased 13% to 122,000.

Ocado said own label products are now found in almost 80% of its baskets in a period that included the launch of its own label shop in shop.

Equipment installation is “advancing well” at the company’s second distribution centre at Dordon. The project is “on budget” and expected to open in the first quarter of 2013.

Mobile devices are now used in almost 24% of Ocado transactions.

Steiner said: “The last six months has been all about delivering our plans to increase capacity, efficiency and range and enhancing our offer to customers. We have done that and improved the EBITDA margin to 4.8% from 4.2% in H2 2011. We continue to put in place the building blocks to deliver further improvements in the rest of this year and future periods.

“Ocado now offers a grocery range which compares favourably against all of the large physical supermarket groups, and we have continued to deliver new ideas and innovations to improve our offer to customers.

“We are pleased that sales growth was in line with market expectations. However, the grocery market and the general economic picture remain challenging and uncertain. The third quarter is particularly hard to forecast as we have already seen some disruption from the Jubilee events, and there is uncertainty as to the effect of the forthcoming Olympic Games, but we expect sales growth to increase in H2 2012 overall.

He added: “More customers of the big supermarket chains are shopping online. While we remain cautious about the general economic backdrop, we are well placed to attract a significant number of these new online shoppers as we continue to enhance our offer to customers.”