Feb 5, 2019

Ocado: a treasure deferred

As Ocado pushes out its technology, further losses should be expected. Ocado then earns a fee once up and running in year three. There is a catch that may startle investors trying to value Ocado using traditional measures. Under new IFRS 15 accounting rules, Ocado cannot recognise £20m of the fees that come in during construction, even though it still gets the cash. Ocado will suffer a cash flow drain, at least short term.

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