May 30, 2018

Ocado seals its place among UK’s blue-chip companies

UK online-only supermarket Ocado has sealed its position as one of the UK's 100 biggest listed companies after a wave of new licensing deals drove up its shares, while struggling high street retailer Marks and Spencer's has narrowly avoided relegation in the latest FTSE 100 reshuffle. Ocado's market value has more than doubled this year, in the wake of agreements to sell its grocery delivery technology to a number of companies around the world. Earlier this month, shares at the company, which was founded by three Goldman Sachs bond traders in 2000, jumped to all-time highs near 900p on news of a deal with Kroger, the second-biggest food retailer in the US. It is currently trading at around 887p, giving a market capitalisation of £5.9bn. Ocado has benefited from "The shift away from the high street towards online shopping," said Russ Mould, investment director at AJ Bell. "The company has been positioning itself as more of a technology company than just a grocery delivery service." GVC's shares are up around 9 per cent since this beginning of the year to give a market capitalisation of £5.8bn. Still, Ocado's trajectory is in stark contrast with that of longstanding UK high-street retailer M&S, which last week appeared close to dropping out of the FTSE 100 - although it has stayed in.

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