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Something of a 'curate's egg', not especially positive overall Here are a couple of bits to give a flavour:
[OCADO JV] profitability is well below original expectations and there is considerable scope to leverage our combined capabilities in sourcing and marketing, and to develop Ocado's delivery service and online experience….
The new Luton CFC opened in September 2023 and delivered a rapid ramp up in operations as business transferred from less productive capacity at Hatfield, with the new site also providing a test bed for on-grid robotic picking. With capacity fees for Hatfield continuing to be charged by Ocado Group, we do not currently expect Ocado Retail to reap the full financial benefit of transferring to the new site.
·Ocado Retail still operates on legacy technology for its website, last mile delivery and supply chain systems. It will be migrating to Ocado Technology's much delayed 'OSP' solution over the course of the next 18 months, which is anticipated to offer customers increased convenience and greater personalisation, as well as long term operational efficiencies for the business.
Although the financial performance of Ocado Retail remains disappointing, the revenue improvement this year under the new management team has been marked. And in a world where several operators have exited the online food delivery market, the potential competitive advantages of the M&S / Ocado combination are increasingly evident.
I had to look that up. I love expressions, have heard this one before, but wasn't sure what it meant. So Boyo, are you using it in it's contemporary or it's 'original' form?
A "curate's egg" is something described as partly bad and partly good. In its original usage, it referred to something that is obviously and entirely bad, but is described out of politeness as nonetheless having good features that redeem it. Wikipedia
As outlined previously Ocado retails push for increased revenue has eroded profitability. That has been further outlined today in M&S results.
I think profitability is mainly due to Ocado not inflating as much as competitors were doing resulting in reduced profitability but increased market share...A catch 22 situation basically...Ocado could increase profits at will here..
They don't sound happy at all about the ongoing use of old systems to run the website and logistics etc and are complaining quite a bit about delays to the new Ocado Smart Platform.
Strange that this is the first we are hearing about these delays.
"They don't sound happy at all about the ongoing use of old systems to run the website and logistics etc and are complaining quite a bit about delays to the new Ocado Smart Platform."
what they want basically is for any of the money they might give Ocado to be invested directly into Ocado Retail , and are giving clear areas where the money needs to go...
They dont want any of it going elsewhere in the Ocado operation ...I suspect
Stupmy's query : I wasn't around when the expression was first used.
" increased revenue has eroded profitability "
fine for now...they had to make a market share positioning decision of how they wanted to compete ..... small share of the market and being seen as more expensive wasnt going to take them far in this new cost of living era
Mks has dynamic leadership who have really turned it round.
Ocado don't and Marks are forcing it to improve
Good for both companies and I hold both.
At the end of the day there's enough negativity in there for shorts to hang their coats on a while longer.
Nothing good
Agreed Sangijuelas1, As expected Ocado retail revenues increasing, profitability decrease. No resolution re the Ocado final payment. MKS have the upper hand there. I don't expect them to cave in.
Short remains the correct position regarding Ocado shares imv
Value, which of the short sellers do you work for? You have never said a positive thing about OCDO! In my mind, whilst M&S are not totally happy with their relationship them, they have helped them with their fantastic growth and seemed determined to help them succeed. You failed to point out that M&S share of the losses were subject ot write offs and higher interest costs:
"Revenue increased 11.2% to £2.47bn and adjusted EBITDA was £26.8m (2022/23: loss £15.1m). While adjusted EBITDA improved, M&S group's share of adjusted loss increased to £37.3m (2022/23: £29.5m) due to higher interest costs on shareholder loan funding and a write off of a deferred tax asset in the current year."
"MKS have the upper hand there. I don't expect them to cave in."
yes..I think it was always going to be that way.
It does suggest though that the idea of court action from Ocado is maybe more verbal bluster than anything too serious, given the strength of argument from the MKS side.
Ocado needs to continue to make progress and review later in the year. I suspect that is what they may well choose to do.
Even if Ocado admitted liability/fault in the MKS fee issue, it would be of great benefit. Markets hate these unknowns. Steiner needs a kick up the wotsit.
Yes indeed waccy. What happens to Steiner’s bonus if OCDO fails to receive any of the £190.7m that was payable on meeting specified targets which were presumably agreed to by him at the time?
Failure to meet those targets or to negotiate appropriate variations in light of circumstances beyond OCDO’s control would surely have been his responsibility.
A similar thought crossed my mind WB, although not obviously a positive for OCDO, writing down the performance related payments immediately removes confusion. If that logic holds, any payment that might get made in the future becomes a positive. As you say, confusion isn't normally good for SP.
MKS product sales on Ocado were up 18%.
I think a lot of the MKS squawking is them trying to get free publicity for their products on the platform given the agreement doesn't allow them to advertise the fact
Nice 3D chess insight there Sang, I think you have an interesting point as I had no idea that M&S could not advertise the fact their products were sold on Ocado. Crazy that that would be the case.
The brand value of Ocado Retail is the Ocado brand. They stock MKS products as they do with other brands.
They are easy enough to find once you go on the Ocado website