(Alliance News) - Ocado Group PLC on Monday raised its earnings guidance for its current financial year, driven by strong trading from its joint venture with Marks & Spencer PLC in the fourth quarter.
The FTSE 100-listed online grocer also announced the acquisition of two companies, Kindred Systems Inc and Haddington Dynamics Inc, for USD287 million in total.
Kindred Systems, a US-based piece-picking robotics firm, will be acquired for USD262 million in cash. Haddington Dynamics, which designs and manufactures robotic arms, was bought for USD25 million, through a mixture of cash and the issue of around 600,000 Ocado shares.
Shares in Ocado were up 8.0% at 2,457.00 pence on Monday in London.
The group said it expects revenue for its 2021 financial year to increase by GBP30 million as a result of the acquisitions, but it also anticipates a small hit on earnings before interest, tax, depreciation and amortisation.
"I am delighted to be welcoming Kindred Systems and Haddington Dynamics to the Ocado group, as we believe they have the capabilities to allow us to accelerate delivery, innovate more, and grow faster. I am also excited by the opportunity to enter new markets for robotic solutions outside of grocery that is demonstrated by Kindred Systems' robust growth, with existing customers such as Gap and American Eagle across the general merchandise and logistics sectors," said Chief Executive Officer Tim Steiner.
For the financial year to the end of November, Ocado has raised its Ebitda guidance and expects the figure to be over GBP60 million, compared to previous guidance of GBP40 million. This means a minimum of a 39% rise from GBP43.3 million the year before.
Ocado attributed the stronger performance to sales remaining in line with trends reported for the third quarter, as well as high demand as consumers move to online grocery in record numbers amid movement restrictions due to the virus pandemic.
Ocado will publish a fourth-quarter trading update on December 10, and then its full-year results on February 9, 2021.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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