Member Info for Athens81

@waccybaccy - another thing here to counter the whole cost of labour argument - in the next few years what is to stop doordash/instacart/deliveroo etc using robot/automated delivery themselves? The US already has driverless taxis/drone delieveries. This would simply be an extension of that, someone loads up a driverless car/bike at the supermarket - it drives to your house and you unload it. Or even a new company on the block coming and offering this. Short term delivery is a growing market and Ocado really need to find a way into it on a big scale, otherwise on the grocery side they will be left behind.

I think one of the issues here is that needing to implement the swift router shows how much pressure the retailers are facing to get orders delivered quicker and quicker. Doordash/Instacart have really changed the face of how people can get groceries online and Ocado realise they need to counteract this. That is good in one sense that they can adapt, but at the same time its not driving big revenue growth which wil drive up share price. CFCs are the big money maker for Ocado but this news just confirms even more that their implementation is very hard to get right. I can't see any US supermarkets moving to start using CFCs anytime soon based on their current setup. Kroger/Sobeys don't seem to be in any rush to expand either. To turn this around Ocado is going to need to bring in a lot of new deals but what are they going to look like? Lots of small MFCs attached to existing supermarkets? This won't be easy as the grocery landscape has changed and there is a lot of competition either directly or indirectly through retailers just choosing a different model entirely for their online fufillment.

Seems like the market has some jitters ahead of results tomorrow! I am hoping for good results tomorrow. I think there is some excellent analysis below from posters and I agree that the naira, demographics, and the wider African economy are the real drivers here which look good. What I am not so sure about is Airtels competitors? How are they performing? Is there are a large enough market for growth for everyone or is there a chance they could start to eat into Airtels numbers?

I think to say "painfully obvious the company has no future." is a little bit on the dramatic side. If the company were only trying to push large scale CFCs to big supermarkets, I would probably have my doubts as well. However its clear the company has diversified its offering in terms of the software/hardware it can offer and the industries it is selling into. Personally I think it will be a very very long road back to 500+ or even 1000+ and there will of course be bumps along the way, but to say no future is a bit of an exaggeration.

I already have a position on Ocado and have been thinking of topping up. Timing never works but I do suspect this could go down a bit more before coming back up. There seems to be a lack of any buyers at the moment which could slowly bring this down further. At 230 and below I would be tempted

@stumpy - I think you hit the nail on the head with - "turning point with respect to uptake of OCADO's tech offering (related to their more flexible approach to smaller business needs). "

Ocado is much more likely to have a success by bringing in more frequent smaller to mid sized deals with their quicker more flexible solutions. I think that is more plausible than believing a big American supermarket will come in for a suite of CFCs, or that Kroger will suddenly start expanding their use of CFCs again. If Ocado can support more modular solutions and pivot to other sectors, then this has every chance to grow. I just don't think this will be a big bang, more of a slow burn back upwards.

Its not a big enough announcement to warrant an RNS. Its not considered something that would have a material impact on share price.

Hopefully the move up can be sustained. The whole market was down today and this has still risen 10% which is a good sign. It would be great to see a few of the shorts closing out over the coming days as well

What is the best outcome for results day? I would assume with market rules any new deals or major expansion to existing deals would have to be announced by RNS as soon as they happen. So if we don't see an RNS prior to the 26th regarding deals, then what could we hope for in results to move this up?

The moves upwards over the last few weeks were not really built on any solid foundations. This means potential for volatility and swings in the share price. All it takes is a bit of general bad news in the market and recent profits will be taken and this will drive down. Could end up dropping even further but then give it a few days will probably be traded back up trying to break 300 again

I didnt say the future of shopping is doordash. Simply that it is now another option and a pretty big one. Its not about someone using doordash for their weekly shop its about people doing multiple smaller shops either in person or via doordash and not using a service like Ocado at all. In my local Sainsburys they have closed off an entire part of the checkout area and they now have a team of people packing items for deliveroo drivers who are queued outside waiting to pick up orders. This is multiplied across thousands of supermarkets. This is all something that was not even a thing a couple of years ago. My point is simply that the grocery sector is very challenging and getting a supermarket to commit to the investment in Ocado is not simple and Ocado now has comptetion which won't require the large investment in capital/time that Ocado needs. Take a look at the Top 5 supermarkets in the US (outside of Kroger) and research their current online offering and then ask yourself if any seem likely to move to Ocado? IMO they seem pretty set with their own inhouse ISF and/or partnerships with doordash etc.

Its not a rejection of the Ocado model, its just there are other options to order groceries online and have them delivered to your door. In the last couple of years instore fufillment either managed by the supermarket directly or via a partner (doordash, deliveroo etc) has taken off. Kroger themselves while closing 3 CFCs have signed a deal to expand doordash to 2700 of their stores. If you take the Top 5 supermarkets in the US (outside of Kroger) they are all using some form of instore fufillment either done inhouse of with a partner like doordash. So taking the US as an example where is the new deal for Ocado going to come from? You will need to convince one of these supermarkets to take on what didn't work with Kroger and hope they can see something Kroger could not. Or if not using CFCs that instead Ocado can support their already established ISF. Its not impossible but I think its a long road ahead. As I have said before I think Ocado may get more business by not just relying on grocers but by moving more into logistics or pharma.

Broker ratings can generally be a bit of a joke but where do we expect Ocado to be priced atm? IMO for this to move up in any significant way its going to need to announce some new business or an decent expansion with any existing business. There is a huge amount of potential with Ocado but the recent track record and bad news with Kroger means Ocado is going to have work harder than others to get market sentiment on its side. We are starting from a very negative position. The consensus in the market is that large scale CFCs are not the future and instore fufillment has come along in a big way. Ocado will need to actually sell either its cheaper CFC solutions, or get some cutsomers onboard for its ISF solutions, or make headway in a new sector. It won't get an easy ride from the market, it will need to prove it can grow expand and grow revenue.

If the Naira can gain that much it can definitely add a boost to the AAF price. Its been in the 1600s only a year ago and now down to 1400 so if it can start to close in on the 1200s would be excellent. I think for me a lot depends on how the Airtel Money spin off pans out and how that will impact existing shareholders.

Ok just ignore my question then. People can make up their own minds

Thanks for your considered reponse to my post. Not sure how stating an opinion is being a troll? What do you think is going to drive the price up then if not new deals or expansion with existing partners?

Thanks for the replies. I bought into this a couple of months before the accounting error annoucement so now sitting on a loss. I think underlying everything there is a good business here, so I think just going to have to wait it out. I hope there is nothing further

Because the recent rise has not been based on any concrete good news that is going to build and grow revenue for Ocado. A bit of shorts closing, some short term trading as well, maybe a few people taking a chance at low prices. Until we see actual sustained good news (new partners or expansion of existing partners etc) this won't have any significant breakouts imo

Is the consensus here that we will need to wait for the outcome of any FCA investigation before we get any significant moves up or down?

290p is probably still a fair price for where we are now. The kroger situation has been clarified but it was still a negative on sentiment. As the note suggests we are now on a "positive catalyst watch" but it still needs a real catalyst to drive this up, without it i'm not sure how much higher this can realistically go? With so much recent negativity I think we will need a fair amount of "catalysts" to really turn the ship around long term.

I think its likely a bit of patience is needed. Taking the US I can't see which major supermarket is going to come in for Ocado based on where they are atm and their current online solutions. Maybe something in another country? I think a much more exciting area is in the logistics and pharma space and I think we we would be more likely to see a deal there than suddenly a new supermarket annoucing a bunch of CFCs