Ocado narrows losses and raises outlook for robotic warehouse arm

The group reported a £154 million pre-tax loss for the six months to June 2 against losses of £290 million a year ago.

It notched up revenues of £1.54 billion for the first half, boosted by a 21.8% surge in its technology solutions business, which powers online grocery businesses and automated warehouses for other retailers.

Ocado retail – run as a joint venture with Marks & Spencer – saw revenues rise 11.3%, helping the division swing to underlying earnings of £20.7 million from a £2.5 million loss a year earlier.

Ocado said it was on track for annual underlying earnings margins in its technology solutions business to be in the “mid-teens”, having previously guided for at least 10%.

This comes in spite of some major customers – such as US grocer Kroger Co, Sobeys in Canada and Coles in Australia – slowing the rollout of automated warehouses.

Ocado’s first-half losses were also better than expected in the market.

It insisted it had a “clear road map” to deliver positive cash flow in 2025-26.

The results come a day after shares in Ocado tumbled after an analyst downgraded his outlook on the stock, saying he believed the online group may need to raise more cash.

Shares in the group are more than 45% lower over the past six months.

Tim Steiner, chief executive of Ocado, said: “We have come through an unprecedented period for online grocery, with multiple years of high food inflation following a surge in demand during the pandemic.

“The global channel shift to online has now resumed and Ocado is uniquely well-positioned to take advantage of the opportunity.”

He added: “The success of our partners is our top priority, and we are focused on helping them execute their online strategies to deliver attractive returns from their investment in our technology.

“While there remains more to do, we look forward to making continued progress over the rest of the financial year and beyond.”