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Ocado records pre-tax profit for first half of the year

Ocado records pre-tax profit for first half of the year

Ocado has continued to perform favourably over the first half of the year after it announced a pre-tax profit for the timeframe.

The online grocer generated £7.5 million over the first six months of 2014 which is a substantial improvement on the loss it made last year. Revenue was up 20.7 per cent to £429.7 million in the 24 weeks to May 18th and the company also reported that earnings before interest, taxes, depreciation and amortisation (EBITDA) had surged by 78 per cent to £34.3 million during the period.

Despite having never made full-year profit, Ocado is confident that these figures can help towards increased growth over the coming months. The company's boss Tim Steiner explained that this latest result showed "significant" progress and it was already in the midst of a planned expansion.

Ocado stated that it has purchase a third warehouse site in Andover, Hampshire. The company has invested £30 million in the new facility, which will be used solely by Ocado. The plans go alongside its intentions to expand its existing warehouse in Dordon, north Warwickshire. It is designed to maintain the level of growth it achieved in the opening six months of the year.

Mr Steiner said: "Although price competition increased, led by the traditional supermarket retailers, significant progress in operating efficiency and the development of our product offer meant that EBITDA was up almost 80 per cent in the period. This was achieved despite increased investment in Ocado’s strategic opportunities for the UK and overseas."

Ocado's service as an online grocery has proved popular with consumers with the company boasting industry leading service levels with 95.7 per cent of its order being on time. Statistics such as this are highly important as the firm continues to battle with major supermarkets such as Tesco, Waitrose, Asda and Sainsbury's which also offer home delivery services.

 

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