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(Alliance News) - Online grocer Ocado early Tuesday said it successfully completed the fundraise that it had announced after the market close on Monday.
Ocado had said it planned to raise the funds to expedite growth plans, amid what it called surging online grocery demand in the wake of the Covid-19 pandemic and the need to bring new technology solutions to the market faster.
The online grocer placed 72.3 million shares at 795 pence each, raising GBP575 million. The placing price was a 9.4% discount to Monday's market close of 877.6p. The stock was down 5.6% at 828.80p early Tuesday.
The placing, led by Goldman Sachs, was done in conjunction with an offer to retail investors via PrimaryBid involving 246,405 shares and 150,944 subscription shares taken by members of the senior management team, including Chief Executive Officer Tim Steiner, Ocado said.
The total equity raise was GBP578 million, and the new shares represent about 9.7% of Ocado's total prior to the raise.
"Prior to launch of the placing, the company consulted with a significant number of its shareholders to gauge their feedback as to the terms and conditions of the placing," Ocado explained. "Feedback from this consultation was highly supportive and as a result the board has chosen to proceed with the capital raise."
The Hertfordshire, England-based company had added on Monday: "The net proceeds of the capital raise is expected to give Ocado Group enough liquidity to fund the requirements of its existing and expected customer commitments into the mid-term, with no additional group financing expected as the business becomes cash flow positive."
In Ocado's most recent financial year, financial 2021, its pretax loss widened to GBP176.9 million from GBP52.3 million the year before.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 7,133.99
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Hang Seng: up 1.6% at 21,500.50
Nikkei 225: closed up 1.8% at 26,246.31
S&P/ASX 200: closed up 1.4% at 6,523.80
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US markets closed for holiday on Monday.
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EUR: unchanged at USD1.0528
GBP: up at USD1.2270 (USD1.2246)
USD: flat at JPY135.07 (JPY135.03)
Gold: down at USD1,835.42 per ounce (USD1,838.66)
Oil (Brent): up at USD114.88 a barrel (USD113.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's key economic events still to come
1000 CEST EU euro area balance of payments
0830 BST UK BoE Chief Economist Huw Pill speaks at ICAEW London & East Economic Summit
1000 EDT US existing home sales
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Train passengers in the UK are being hit by major disruption on Tuesday due to the largest strike by rail workers for a generation. Usually busy stations such as London Euston were nearly deserted except for picket lines by union members early today, with the start of services delayed until 7.30am local time. Only a fifth of trains are running, half of lines are closed, and the network will be shut down at 6.30pm. Transport Secretary Grant Shapps said ministers would change the law to minimise disruption from strikes by requiring a certain level of service to be run and enabling the use of agency workers. Much of Britain will have no passenger trains for the entire day, including most of Scotland and Wales, the whole of Cornwall and Dorset, and places such as Chester, Hull, Lincoln and Worcester. Last-ditch talks failed to resolve the bitter dispute over pay, jobs and conditions, with all sides blaming each other for the lack of progress. Strikes are also planned for Thursday and Saturday. London Underground services are also suspended on the vast majority of lines Tuesday.
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Russia's blockade of Ukrainian grain exports sparked fresh tensions with Europe as fears grow of a global food crisis, while Kyiv accused Moscow of stepping up attacks in the east of the country. Since being repelled from Kyiv and other parts of Ukraine following their February invasion, Moscow is focusing its offensive on the eastern Donbas region. Its navy is blockading ports, which Ukraine says is preventing millions of tonnes of grain from being shipped to world markets, contributing to soaring food prices. Prior to the war, Ukraine was a major exporter of wheat, corn and sunflower oil. EU foreign policy chief Josep Borrell called the Russian blockade "a real war crime", which was happening "while in the rest of the world people are suffering hunger".
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BROKER RATING CHANGES
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Deutsche Bank raises Pearson to 'buy' (hold) - price target 900 (625) pence
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JPMorgan cuts AB Foods to 'neutral' (overweight) - price target 1,900 (1,940) pence
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Oddo BHF cuts Asos to 'underperform' (neutral) - price target 900 (2,100) pence
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JPMorgan cuts Asos to 'neutral' (overweight) - price target 1,500 (2,900) pence
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COMPANIES - FTSE 100
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DS Smith said it has seen good early momentum in the start of its current financial year, despite a more-challenging backdrop. For financial 2023, DS Smith expects corrugated box volume growth in a range of 2% to 4%. It plans to increase capital expenditure to GBP500 million to invest in "customer-led growth opportunities". Chief Executive Officer Miles Roberts said: "It has been another year of volatile trading conditions where we have worked through the tail-end of the pandemic and, more recently, the tragic events of the Russian invasion of Ukraine. "The new financial year has started well, building on the momentum from the previous year. Whilst there remains considerable uncertainty about the overall economic environment, our expectations remain unchanged. Strong customer demand reinforces our confidence to invest in the business, with capital expenditure expected to further increase in the current year."
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Rolls-Royce Holdings will hand out a GBP2,000 lump sum as well as a pay rise to employees to help with the UK's cost of living crisis, Sky News reported. The jet engine maker is offering a 4% pay rise backdated to March to 11,000 shopfloor workers in its UK manufacturing plants, alongside the cash sum. It also intends to provide the GBP2,000 lump sum to a further 3,000 junior managers. The one-off lump payment will cost Rolls-Royce GBP28 million, while the pay rise will take the total cost to more than GBP40 million, Sky reported. Chief Executive Warren East was said to have decided the pay rise was vital to maintain morale among the workforce.
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Moody's affirmed the debt ratings of telecommunications firm BT. Moody's affirmed its Baa2 senior unsecured and long-term issuer rating, Baa2 senior unsecured MTN programme, Prime-2 short-term issuer rating and EE Ltd's Baa2 long-term issuer rating. Moody's also affirms the Ba1 long-term subordinate rating on the hybrid notes. Moody's moved BT's credit outlook to stable from negative. "The change of outlook to stable from negative mainly reflects Moody's expectation that BT will experience further recovery in [earnings before interest, tax, depreciation and amortisation] in fiscal year ending 31 March2023 supported by a more favourable pricing environment in the Consumer segment," the credit ratings agency said.
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COMPANIES - FTSE 250
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John Wood said it has promoted Chief Operating Officer Ken Gilmartin to CEO, effective from July 1, following an "extensive selection process" that considered both internal and external candidates. Gilmartin joined John Wood as COO in August of last year and will succeed Robin Watson, who announced his intention to retire in April. Watson will step down from the board effective from July 1 but will remain with the company until September 30 in an advisory role to support the transition, John Wood said. Chair Roy Franklin said: "Ken...has impressed the board with the impact he has made over the last nine months, where he has brought clarity, structure and focus, and a strong client-centric mindset to the role, and by his drive to lead the development of Wood's future strategy."
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COMPANIES - GLOBAL
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Mondelez International will acquire US energy bar maker Clif Bar & Co for USD2.9 billion. The Chicago, Illinois-based food and beverage company said the acquisition will expand its global snack bar business to more than USD1 billion, as well as accelerate the reshaping of its portfolio to "sustain higher long-term growth". It is expected to be top-line accretive in year two. Mondelez will continue to operate the Clif Bar business from its headquarters in Emeryville, California. The company will also continue to manufacture its products in its facilities in Twin Falls, Idaho, and Indianapolis, Indiana.
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Tuesday's shareholder meetings
1Spatial PLC - AGM
Altus Strategies PLC - AGM
Coca-Cola HBC AG - AGM
FireAngel Safety Technology Group PLC - AGM
HC Slingsby PLC - AGM
HSS Hire Group PLC - AGM
Mission Group PLC - AGM
Novacyt SA - AGM
Pendragon PLC - AGM
RTW Venture Fund Ltd - AGM
Velocys PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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