(Alliance News) - Ocado Group PLC on Tuesday said its revenue growth was driven by increased demand, but its loss widened in its most recently-ended financial year due to increased costs.
The stock was 0.9% lower in London in early trade at 1,205.50 pence a share.
The FTSE 100-listed online grocer said its pretax loss widened in the 52 weeks ended December 1 to GBP214.5 million from GBP44.4 million a year prior due to an increase in operating expenses.
Ocado said its administrative expenses grew by 88% to GBP314.2 million year-on-year, while distribution costs were 18% higher, at GBP571.8 million. In addition, finance costs more than doubled to GBP30.9 million from GBP14.7 million the year before.
The company explained that in February 2019, a fire destroyed the Andover customer fulfilment centre, including the building, machinery and all inventory held on site.
As a result of this capacity constrain, Ocado said it had agreed with Wm Morrison Supermarkets PLC to withdraw temporarily from the Erith customer fulfilment centre and so to release additional capacity to Ocado.com, but this meant that Ocado was responsible for all the fixed costs at this site whilst it is in early stages of growth.
Also, there is a net cost of GBP88.0 million relating to the Andover customer fulfilment centre associated with the write off of assets lost in the fire.
Elsewhere, Ocado said it had made two investments into technologies and know-how to "revolutionise the way customers access fresh food", and two smaller investments in robotics start-up company and a 3D printing company.
More positively, Ocado reported revenue growth of 9.9% during the year to GBP1.76 billion from GBP1.60 billion a year earlier, driven by an increase in the average number of orders per week.
"We are pleased to report results which show strong momentum in the business. 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," said Chief Executive Tim Steiner.
Ocado Retail is a 50/50 joint venture between Ocado Group and Marks & Spencer PLC, while Ocado Solutions helps grocers around the world develop on-line grocery services.
Looking ahead, Ocado said it expects revenue growth of 10% to 15% in its current financial year, with operating margins improvement. The company said it also expects to recover insurance proceeds related to Andover fire "over time".
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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