Mar 14, 2017

Ocado revenues grow but average order size falls

Ocado reported growing sales in its first-quarter trading update but gave sceptical investors no sign of the transformative overseas deal that it first promised more than a year ago. "Yet Ocado would need to sign one deal per year to justify [them]," he added. Duncan Tatton-Brown, Ocado chief financial officer, said the company was "As confident as we have always been" of the prospects of selling its technology abroad. The company's shares, which were up 2 per cent at 226p in afternoon trading, trade at a multiple of more than 130 times last year's earnings. Average order size continued to decline, although a 1.5 per cent year on year fall to £110.84 marked a slower pace than in recent quarters, and the company said the shift was driven partly by successful efforts to encourage customers to make more regular orders. Ocado suffered years of losses while investing heavily in delivery infrastructure, even as supermarket giants such as Tesco and J Sainsbury opened internet arms that required less capital because they mostly operated out of existing stores.

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