Sep 19, 2017
Higher costs of developing robot warehouses knock Ocado shares
Shares in Ocado, the online supermarket that aims to reposition itself as a retail technology provider, fell on Tuesday morning after it said it would spend more than anticipated on developing new robot warehouses. The relatively robust results were overshadowed after finance director Duncan Tatton-Brown told analysts that Ocado would spend "An extra couple of million pounds" this year on hiring software engineers to work on automating its warehouses. Ocado shares fell 5 per cent to 286p. Ocado has developed an automated system where orders go from its warehouse to customers' shopping bags without ever being touched by a human worker. The extra spending on the projects slightly spooked analysts, with Goldman Sachs noting that it now expected "Low single-digit downward revisions" to profit forecasts for Ocado. Ocado has borrowed heavily to plough cash into its robot warehouses, and now has £284m of debt outstanding, representing a £33m increase in net debt.
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