Ocado revenue rises 11%, boosted by orders

Ocado Group PLC (OCDO.LN) on Tuesday reported an 11% rise in retail revenue for the first quarter of fiscal 2019 and said that it benefited from strong underlying growth in average orders per week.

Retail revenue for the 13 weeks ended March 3, a period including the key Christmas and New Year trading periods, was 404 million pounds ($535.7 million) compared with GBP363.4 million for the same period a year ago. The online grocer delivered an average of 314,000 orders per week in the period at an average price of GBP110.24 each. This compares with 282,000 orders at GBP110.45 for the same period last year.

The company announced on Feb. 6 that a fire struck its Andover distribution center in England, which provides over 10% of the company’s overall capacity. The fire, which caused substantial damage, affected the equivalent of 1.2% of sales in the quarter, the company said. The company also said at the time that it had insurance for the property and equipment on site, as well as for losses from interrupted business. The investigation is ongoing, and the company is taking measures to make up for the loss in capacity, such as setting up a temporary spoke in Andover.

Late last month Ocado announced its joint venture with Marks & Spencer Group PLC (MKS.LN), which will start when the current distribution deal with Waitrose ends.

Under the joint venture, which will trade as will trade as Ocado.com, M&S will buy a 50% share of Ocado’s U.K. retail business for up to GBP750 million.

The JV will have access to M&S’s brand, products and customer database from September 2020 at the latest, following the termination of a Waitrose sourcing agreement and migration of JV sourcing to M&S.

Ocado had cash of GBP390.7 million at March 3, and external borrowings of GBP288.5 million.

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