Jun 22, 2022
Ocado investors willing to wait for long-promised returns
Ocado needs a little more patience from its investors. In the years since Ocado signed a landmark deal with US grocery giant Kroger, spending on CFCs outside the UK has exceeded £500mn and another £400mn is earmarked for the current year. At a recent investor presentation, Ocado indicated its current order pipeline could generate total profits of more than £750mn in the "Mid term", with a typical CFC generating a return on capital of over 20 per cent. "The Ocado experiment has been going on a long time and the earnings and cash flow terms have been entirely absent," said Clive Black at Shore Capital. Ocado has reassured investors this cash call will be the last for some time, saying it has "Enough liquidity to fund the existing and expected customer commitments in the mid term".
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