Member Info for Boyobach

Does anyone know when Retail’s costs relating to the redundant CFC at Hatfield are due to end?

I appreciate that it's a shared JV cost with MKS that presumably results in a net income to OCDO of 50% of the annual £33m fees charged by Tech - however it does point to either poor forward planning or lack of flexibility redeploying modules during their paid-for service life. As MKS put it in their last FY Report:

'With capacity fees for Hatfield continuing to be charged by Ocado Group, we do not currently expect Ocado Retail to reap the full financial benefit of transferring to the new site.'

It is one of VP's valid criticisms, an unwelcome blot on both the Luton CFC project, which opened over a year ago, and draws attention to apparent constraints associated with relocating robotic tech in response to business needs.

With that detailed analysis from Den, what could possibly go wrong? https://invst.ly/17cswi

I hope Max’s 315 limit order today doesn’t prove to be too premature. I guess it was based upon September's very brief low. However, chartwise, the current trajectory is not encouraging. The next historic support level at 280 is some distance below today’s price: https://invst.ly/17clu8

So, having failed to maintain 340/350 and dropped to 310 with hardly a pause, OCDO is potentially heading lower unless it somehow holds onto the previously weak support briefly seen near 306 in June.

Is the robotic technology delivering for the retail side of OCDO and, if so, why isn't that part of the business in profit?

After all, that's the point of the technology. If I'm reading it correctly, Logistics appears to generate over half of the group's EBITDA according to the 2023 FY (please DYOR to verify and confirm) . Whilst Retail continues to be the essential core of the Group, the profits are largely claimed by Tech and Logistics through internal charging. Is that a model that would really appeal to a pure retail organisation, where the technology would be an external cost?

The seven month levelling out, which began in April, is under pressure for the third time https://invst.ly/17bpb7

And, despite breaking through some significant negative trends in order to level out, there’s still at least one more to deal with, as this wider view shows: https://invst.ly/17bpig

The M&S Report highlights Hatfield OSP fees, which continue to be a drag on OCDO Retail profitability.

In FY23 this was reported as an income for Technology Solutions worth ‘circa £33m per annum’ which enhances Technology Solutions earnings at the expense of Retail whilst also drawing attention to the costs associated with overcapacity in a redundant automated warehouse. Little wonder that OCDO retail and other partners are wary about adding further CFCs.

The fundamentals haven’t changed much in the last seven months and, apart from being temporarily breached a couple of times by unsustained market over-reactions and likely stop loss triggers, the most consistent thing about OCDO during that period has been the support level at 340 with successive long-term negative trends being broken in the process.

Thanks to the support level, Max’s nascent green trend is still intact but I’m inclined to think that the current horizontal trading range will be maintained for a while yet. https://invst.ly/173xv3

It's all about probability: the tools just help gauge it. Trends are often most useful when they get broken.

Blackrock's slight short increase on Friday is interesting, may have taken the bounce out of yesterday's initial spike upwards. Probably coincidental that it only reached the incoming red trend at 371. Staying above 340 into December appears to be the current challenge. I'm in but not adding. https://invst.ly/173q9f

Two lows does not a trend make...(three is the minimum) they are then not that subjective ... however the bounce you were anticipating may be developing today, which will establish that trend more firmly . Hopefully it will repel the somewhat weakened negative trend incoming. https://invst.ly/173027

Yes Max - 19th Sept was a good call and, having locked-in that profit, reentry at 346 seems like a natural move to me.

https://invst.ly/172e65

Levelling out above 340 since the March FY results has been mostly solid but with Sobeys news and analyst ratings causing temporary - but significant - dips below. OCDO remains speculative, of course, but the retail side generates profit and the tech side is now also doing so. Meanwhile, the amortisation of development costs enables the ‘never made a profit’ narrative to be maintained and I think this will remain a drag on the sp for the time being.

I don’t happen to think the green trend you describe is sufficiently established just yet to base too many expectations upon but neither are there any established negative trends, with the long term ones having been broken or pushed aside by the levelling out. Indeed, levelling out remains the theme for me, with 410 looking a bit optimistic as the top until there's either some news or numbers to support it . Anyway, good luck with the new tranche.

Although OCDO has returned to the familiar support level around 350, it is struggling to cycle back up and is gradually pulling its 3 month SMA (blue, currently at 364) back down: https://invst.ly/16zzy8.

The three year negative trend (red) has now been pushed outwards a couple of times as the sp has levelled out and has consequently been reduced in unbroken length to just 18 months: https://invst.ly/16z-29 . I guess it could still represent a challenge over the next week or two but, with sentiment looking fairly steady at the moment, the likelihood of 340 being breached again seems to have dropped away and, with it, the immediate prospects for shorts. So, not much to see here currently IMV as the underlying levelling out seems set to continue.

Probably bounce time from around here…

Don't get too excited. Despite all the volatility, induced by various news and hypes, 360 has been the effective mid point of OCDO’s sp swings for the last six months, which has possibly been the most level period for OCDO since 2017, when the sp was just a quid less. Yes, the sp has been nudging up rather than down lately but it's very marginal and clearly vulnerable to news.

Hey 2phev’s. What sentiment shift are you referring to? If you mean the 40p drop over the last 4 days that’s just part of the normal OCDO cycle. It’s still between 340 and 410 isn’t it? Just join the ride and chillax. https://invst.ly/16unk5

It’s only if it breaks above and below that range that it becomes a problem for some on this board.

Other than this week's short-term pull-back, I don’t actually see an established long term negative trend.

With the sp recently testing 410 again, the 3 month MA rising steadily to over 370 since mid-July and shorts like Blackrock gradually unwinding, the clues point to a positive shift in market sentiment since June’s 278 low point. The next low should provide a clue about near-term direction, so it will be encouraging if the sp rises from today’s 364 low without falling further, whilst anything around 350 would suggest to me a continuation of the six month levelling out in the mostly 340 -380 range.

https://invst.ly/16u3tq

Yes 2PHEVs, that big pair of trades was picked up on the 15’ trading chart, priced about 392 - ie around 12p above the going rate at the time, with the underlying price steadily recovering from there. Potentially on the way back up now - cracking the 410-415 barrier without visiting the 360’s again would be a good move now. It'll be interesting to see if support at 380/375 holds firmer this time around.

(15’ view: https://invst.ly/16tj4t )

Well it is still a volatile and speculative stock, VP, but the short-term risks either way have been converging.. There’s no doubt that the three month average level has turned upward since late July. The ‘bubble’ to 450 that started that process was very brief, along with the even shorter spike of optimism to 400 last month. Market sentiment has, however, moved more positively, including a vastly different response to this September’s trading statement than last year when it received an immediate hit from 808 to 647 followed by a decline to 451 - a total fall of 44% in a month. Does the market have a better handle on OCDO’s value today? That’s debatable - its track record has hardly been good - but, behaviourally, it appears to be moving closer to some kind of consensus after years of over anticipation and reaction to rumour, with the sp currently spending much less time below that 3 month MA and levelling out about 25p higher than I envisaged a month ago. Yet there’s still enough volatility to make trading it interesting too.

It will be interesting to see the level of the next low, which will indicate whether the inching up of OCDO’s average sp since July (blue = 60 day MA) is set to continue: https://invst.ly/16tbay . The next attempt to capture 400 should stand a good chance if the current pull back is limited, ideally to above 375.

Lower volatility and a steady average increase is what LTH’s should be looking for and could lead to a progressive reduction in shorts.

Fourteen years from listing is a reasonable test of patience - some would say excessive.

How big is Facebook's market?

How big is Amazon's market?

How big is OCDO's tech market?

Comparisons require a reasonable level of similarity, especially in terms of scale.

There's a fine line between patience and hope but numbers provide a sound basis for calculation of prospects.

OCDO's numbers have been poor, partly due to some management issues (eg failure to achieve the final MKS JV payment and excess capacity like unused legacy systems at Hatfield weighing on internal retail costs but making tech revenue look superficially better than it is). However there are signs that this fundamentally poor overall performance might be turning round, provided Tech starts to pull its weight. This still remains to be seen though: the market has been predictably hesitant at the 400 level and the shorts haven't been shaken off just yet.

Fair points guys: Symbotic is not right at the 'picking end' of the chain. However, they are an indicator of automated warehouse systems demand and they aren't doing too well. Many here would prefer to see OCDO identified as a Tech outfit but - up until now - it's the retail performance that has kept it afloat (just) . And some of that success has come at a cost in the price competitive zone. The sp knocked at the 400 door for the second time on Thursday and the odds will shift further in its favour on the third attempt but it's being lifted by retail not tech currently. In the continued absence of net profit the tech side needs to start delivering. Shorts haven't retreated for a week now according to Shorttracker, so they are not unwinding significantly just yet - another indication that the market wants to see results rather than mesmerising robots dancing on a grid.

Whilst shares in US rival Symbotic vastly outperformed OCDO initially after they launched a couple of years ago, ( Symbotic v OCDO here: https://invst.ly/16shav ), they have actually performed just as poorly as OCDO since the beginning of this year, dropping around 45% - https://invst.ly/16sd9v , despite being up about 20% yesterday on news of commercial agreements with Walmart de Mexico for a couple of warehouse automation systems in locations near Mexico City. It also seems there is a potential class action on the way from shareholders that lost money when the stock price fell about 20% on July 29th after an unexpected change of guidance in its Q3 results. (source links below). It seems warehouse automation isn’t going through a great patch right now.

https://www.marketwatch.com/story/symbotic-shares-rise-20-on-warehouse-automation-deal-with-walmex-ef540d95?mod=investing.

https://www.prnewswire.com/news-releases/shareholders-that-lost-money-on-symbotic-incsym-should-contact-the-gross-law-firm-about-pending-class-action---sym-302272243.html