Shore Capital says 'sell' Ocado despite financial turnaround

Ocado has delivered its first-ever annual profit and analysts at Shore Capital have welcomed the milestone but still kept a 'sell' recommendation on the online grocer.The company delivered a pre-tax profit of £7.2m for the year ended 30 November 2014, compared with a loss of £12.5m previously, marking the first time out of the red since its launch in 2000."Yes, following a decade and a half of trying, Ocado has worked out how to deliver baked beans, ice cream, Jaffa cakes and chipotle chillies without booking a bottom-line loss," Shore Capital said."We welcome the passing over of this financial threshold by the group."However, the broker said investors will still have to wait before Ocado can deliver "material" earnings per share, which stood at just 1.18p last year.The company would need to achieve this before its stock price can be considered a sensible value, Shore Capital said.At the same time, a dividend payout still remains some time off, the broker added. "That said, on a price-to-earnings ratio well in excess of 100 times, dividends are not at the forefront of investors' minds!"Ocado's share price was up 4.2% at 432.8p by 11:04.