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Ocado boss hits back at City doubters as speculation swirls about firm’s future on London stock market
Ocado’s valuation hit a high of £21billion during the pandemic but it has since tumbled to just £3billion
THE boss of OCADO has hit back at City doubters as speculation swirls about the firm’s future on the London stock market.
The comments come after the firm’s shares endured a yo-yo past few days.
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There was a 17 per cent fall on Monday when a long-time supportive analyst questioned if it should remain a listed company.
However, yesterday it went back up 19 per cent after boosting earnings forecasts, as well as also ruling out another equity raise.
Ocado’s valuation hit a high of £21billion during the pandemic — with belief it was the future of online shopping.
But it has since tumbled to just £3billion as shoppers have flocked back to stores and some of Ocado’s retail partners have paused plans for more robotic warehouses.
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The City’s impatience has prompted intense pressure for the business to switch to a New York listing, where investors are more willing to back tech firms.
Tim Steiner, who co-founded Ocado in 2000 and remains CEO, said the market “can be tough for some companies”.
He added: “Right now we’re a UK-listed PLC and I have no immediate plans to change that.”
But he then dropped a hint it could still switch in the future.
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He said London is a “natural place” while it has its Ocado Retail joint venture with Marks & Spencer.
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But he added: “In the long term future as a global tech company, could you consider other markets? You could.”
Ocado Retail is a joint-venture with M&S and the two sides have been locked in a disagreement about fees.
Industry sources suggested the situation could be tidied up as M&S, flush with its recent turnaround, could buy out the rest of it, which would allow Ocado to focus solely on its technology arm.
Mr Steiner said that the majority of his working time was focused on delivering efficiencies and technology solutions for his eleven retail partners.
Those include Kroger in the US and Aeon in Japan, rather than listing conversations.
Ocado yesterday increased its profit margin forecasts for its technology business and cashflow goals to £150million from £100million.
Mr Steiner said the business would be cashflow positive in 2026, but profits would still be “four to five years” away.
Despite online growth slowing down he said that it had now returned to its “pre-Covid growth trajectory”.
Ocado Retail was the fastest growing grocer over the past month — with sales rising by 10.7 per cent in the past 12 weeks to June 7, according to Kantar industry stats.
Mr Steiner said Ocado was benefitting from the failures of ultra-fast delivery firms such as Gorillas and Getir.
Frocking to the High Street
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ONLINE fashion firm Sosandar is set to breathe fresh life into the High Street with plans for its own in-person stores.
The womenswear brand is stocked by Marks & Spencer and Next, but will now open two standalone shops in Marlow, Bucks, and Chelmsford, Essex.
Co-founder Julie Lavington said the company has identified up to 50 store sites and plans to open 10 shops a year.
She said: “I think we are a long way off the High Street being dead.”
Weather 'hits B&M'
DISCOUNT retailer B&M has blamed uneasonal weather for a slump in Spring sales.
Like-for-like sales dipped by 3.5 per cent in the first financial quarter of 2024.
It faced tough comparisons to the same time last year, when it saw a 9.5 per cent jump as people hunted bargins in the cost of living crisis.
But B&M said new sites at old Wilko stores were “performing ahead of expectations” and that it would open 45 new shops this year.
£183k lift for water row boss
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SOUTHERN Water is handing its boss a £183,000 bonus, despite trying to hit customers with a 73 per cent increase in household bills.
Lawrence Gosden’s total pay will be bumped up to £764,000.
Southern tried to hit its customers with a 73 per cent increase, only for regulator Ofwat to limit the rise to 44 per cent, before inflation.
It will still be pushing through the biggest bill increases of all the water companies, charging customers an extra £183 a year.
The bonus comes as it recorded a £210million loss this year and was fined £330,000 in February for raw sewage dumps killing 2,000 fish in a river near Southampton.
Southern justified his bonus saying it had made a reduction in overall pollution numbers.
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It came as it emerged yesterday every single water company in England and Wales is now under investigation by Ofwat for sewage spills.
Cost aid on food
FOOD inflation has eased to 1.6 per cent in the four weeks to July 7 in a boost for squeezed households.
It is the lowest rate of price rises since September 2021 and a long way down from the record high of 19.1 per cent last March.
Figures from Kantar show football fans drove up beer sales 13 per cent in the past month. Booze-free options were also popular on “school nights” with sales up 38 per cent.
Grim summer weather has pushed up sales of fake tan and cold and flu medicines while sun cream sales have slumped.