Adrian Hargrave, CEO of SEEEN, explains how the new funds will accelerate customer growth Watch the video here.
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I've just read that Sangi, it's an appalling piece by a barely literate cretin who has tried and failed to make a coherent story out of various 'analyst' views. He seemed to me to have zero understanding of his material and a very weak grasp of english. Nothing in that piece that has not been discussed more effectively by some of the people on this board. How that got past an editor I don't know.
Yeah especially the bit about Ocado not having any business operations in the US.
OCDO's identity crisis is a problem of its own , or rather, T Steiner's making. A smarter outfit would have made it work through clearer branding
As an example, when BT launched itself as a TV channel it immediately became a competitor with companies that used its services. OCDO is not dissimilar in that regard. It can work but it can also create conflicts that need to be managed.
Ocados key problem is that it's tech isn't being sold. There have been no new automated CFC orders in the last year for Ocado Solutions. As this continues competitors are making inroads. Shorting Ocado remajns the straightforward position to take.
Valueplay. They don't need new orders. Recurring solutions revenue was 380 million last year and that's well less than half of the committed cfcs built. Even if they'd didn't sign any further deals then solutions revenue is still going to be over 1bn once all the contracted cfcs are built. And without the expense of building more will make a tidy profit.
Also they have enough partners at the moment. There's only so many that can be built at once as ocado pays most of the upfront costs.
Jtrade you talk sense but that doesn't fit the agenda of some here who are clearly short or are posting on behalf of the shorting institution - you know it happens. The fact is now no one is selling at this price so more downside is limited. Plus a US listing would likely have a very positive impact. Medium to longer term hold for me and I'm expecting good things.
The hype - Tim Steiner at the Ocado reimagined tech launch in 2022 "We expect that the improved economics offered by Ocado Re:Imagined will drive incremental orders and accelerate the sign-up of new partnerships in the years to come."
The reality - Over the last year Ocado Solutions has received no new automated CFC orders.
VP makes the reasonable point that ‘Over the last year Ocado Solutions has received no new automated CFC orders.’ although this appears to overlook the McKesson deal in Canada. However that observation needs to be assessed in terms of what OCDO’s primary objectives are and how much resource it is able to deploy to service existing contracts and manage its own retail infrastructure. In other words, perhaps it already has its hands full and has to target resources and sales activity accordingly. TS seemed to say as much in the FY statement, in which he said [edited by me]:
‘In the current year, we expect to help put our partners well on the path to generating attractive returns…. a key deliverable to drive orders for more capacity in their existing sites and additional future sites. This is, for now, the primary focus of the business.’
So, the primary focus recently has not been sales. And, obviously during 2023, they set themselves the task of reducing their warehouse sq footage at Hatfield by the transfer to Luton, resulting in a 60% reduction in sq footage. Expansion of the JV model in the UK may well be required, depending on what the Retail strategy there continues to be - and it’ll be interesting to see what M&S may have to say about that in the coming week.
I’m not saying that the lack of orders is a good thing, I’m just saying that OCDO cannot necessarily be measured by CFC sales alone: it’s not like a shipbuilder, for example, where items are built and delivered and that’s the end of the story.
This is a business based on the ongoing support and tech development of installed infrastructure - expansion of that infrastructure needs to be kept within manageable limits as failure to support it properly would be very damaging.
A correction there: The move to Luton at 346000 sq ft from Hatfield at 1.2m sq ft, represented just over 70% reduction in warehouse area - rather more than the 60% I stated.
All of these events for instance reduction in area of warehouse, or no new CFCS in the past year or so, or spokes getting reduced etc reflect the current market valuation of Ocado. Market is currently fully discounting any growth for Ocado in the next few months/years to come. My investment is based on its potential to become a tech player that will be embraced by the market instead of just a grocer that is what the market perceives currently. Remember even Tesla was losing money in its early years and only started making meaningful profit since 2019-2020. Agree Ocado has not been profitable for 20 years or so, but that doesn't mean it can never be.
Phoenixy: To be clear: the large reduction in warehouse space by the move from Hatfield I mentioned was a positive indication of improved efficiency and use of capacity during a period of strong customer retention and growth. It was not a negative comment.