Last checked at 
* Pretax loss widens to 214.5 mln stg
* Core earnings fall 27% to 43.3 mln stg
* Says underlying performance "encouraging"
* Flags capex of 600 mln stg in 2019-20
* Shares up 3.6%
(Adds details, analyst comment, shares)
By James Davey
LONDON, Feb 11 (Reuters) - British online supermarket and
technology group Ocado reported a ballooning annual pretax loss,
mainly due to a fire which destroyed a hi-tech flagship
warehouse, and forecast a more than doubling of capital
expenditure in its new financial year.
Ocado on Tuesday said it expected to spend around
600 million pounds ($774 million) in 2019-20 as it prepares to
open robotic warehouses for overseas partners.
The first half of the year will see the opening of the first
such state-of-the-art facilities, for Sobeys in
Toronto, Canada and Casino in Paris, France.
They are the first of more than 30 sites that will be
operational over the next few years.
Ocado has transformed itself over the last two years from a
domestic grocery delivery firm to a provider of online retail
technology, also winning partnerships with Kroger in the
United States, Coles in Australia, and most recently
Aeon in Japan.
The deals have helped to push its shares 34% higher in the
last year, giving it an 8.6 billion pound stock market valuation
that dwarfs the equity values of traditional British supermarket
groups such as Sainsbury's and Morrisons at 4.4
billion pounds and 4.3 billion pounds respectively.
Ocado's shares were up 3.6% at 1054 GMT, even though it said
its loss before tax widened to 214.5 million pounds ($276.8
million) in the year to Dec. 1, 2019 versus 44.4 million pounds
in 2017-18. The loss reflected exceptional charges of 94.1
million pounds, mainly relating to the write-down of the Andover
site in southern England that was destroyed by a fire in
February last year and is now being re-built.
While Ocado is fully insured, there is a time lag before it
receives the full payout due.
Some analysts have questioned Ocado's valuation, saying that
execution risks are proliferating and opportunities for it to
win sizeable contracts in new geographies are becoming more
limited.
"Our estimates suggest shareholders currently expect the
Ocado Smart Platform (OSP) to build to a total picking capacity
size of circa 50 billion pounds in the next 10 years. Which
feels far too optimistic to us," said analysts at Jefferies.
CORE EARNINGS IN LINE
Ocado posted earnings before interest, tax, depreciation and
amortisation (EBITDA) of 43.3 million pounds ($55.9 million),
versus a re-stated 59.5 million pounds for 2017-18.
That outcome, which also reflected accounting changes and
the costs of share schemes, was broadly in line with analysts'
consensus forecast.
The wider losses and drop in core earnings were despite a 9%
increase in group revenue to 1.76 billion pounds, including
10.3% growth in retail revenue.
"We are pleased to report results which show strong momentum
in the business," said Chief Executive Tim Steiner.
"Although statutory results reflected a combination of
factors, including the impact of the Andover fire, the
underlying performance of Ocado Retail and the successful growth
of Ocado Solutions were very encouraging."
The Ocado Retail division is now a joint venture between
Ocado Group and Marks & Spencer. Their deal, completed
in August, signalled the end of Ocado's supply contract with
upmarket supermarket chain Waitrose in September 2020 and the
start of M&S' first grocery home delivery service.
Ocado said preparations for the switchover were progressing
well.
For the 2019-2020 year Ocado forecast retail revenue growth
of 10-15% and invoiced international technology fees growth of
at least 40%.
It forecast EBITDA from retail above its revenue growth.
However, EBITDA from UK solutions & logistics and from
international solutions was forecast to decline.
Prior to Tuesday's update analysts' average forecast for
2019-20 EBITDA was 33 million pounds.
($1 = 0.7752 pounds)
(Reporting by James Davey; editing by Kirsten Donovan)
