The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
One of the main features of the Ocado business model is that they have an ongoing relationship with all their solutions partners with revenue continuing to flow.
This means that they have an incentive to continue to innovate and improve their offering not just for new customers but for their existing customers as well.
I totally agree with cureboy.
The whole market seems to be ridden with manipulation with every rumour, minor financial misfortune and event having a greatly exaggerated effect on a companies SP.
I have absolutely no faith in the press and question the truth in every story they produce.
The trading update from Ocado Retail on the 26th March should make good reading.
News today that Ocado Retails sales rose by 12.2% for the last 12 weeks compared to a year ago - the highest increase of any UK supermarket, including the discounters.
In second place was M&S on 11.9%
https://www.telegraph.co.uk/business/2024/03/05/marks-spencer-outpaces-aldi-and-lidl-supermarket-sales/
Thank you b@xter
This is from the Telegraph report -
"Marks & Spencer’s grocery sales are growing faster than Aldi and Lidl as a turnaround led by chief Stuart Machin gains traction.
Industry figures reveal that M&S was the fastest growing traditional grocer over the last 12 weeks, with the total take at its tills rising by 11.9pc compared to a year earlier.
That compared to growth of 6pc at Aldi and 10.4pc at Lidl, according to market research company NIQ.
Only Ocado’s sales rose faster, rising 12.2pc on the prior year"
Its good to see Ocado Retail also performing well - full credit for most of that improvement is also down to M&S.
Regarding Kroger
It now seems unlikely that the merger with Albertsons will go ahead.
This will I think give Kroger fresh impetus to increase there online offering, especially in areas where they don't have stores.
This could be good news for Ocado, although the issue is still unresolved.
https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons
Actually Ocado Group is progressing OK.
The problem is the poor sentiment associated with the reality of the dismal macro.
Growth companies always suffer when economic conditions are tight, especially with growth being so slow around the globe.
Currently most investors are primarily looking at profitable companies who are paying dividends - Ocado is clearly not going to do this any time soon.
But, Ocado remains an excellent long term investment and a strong buy for a long term hold at these levels.
Basically if you invest in UK listed shares, MKS is still an excellent option.
Although the macro is still dire and its still raining.
You just have to hope that the sun starts shining soon.
Is this so called disagreement actually a leak or is it simply press speculation or even bogus information fed to the media by someone shorting the stock - anything is possible.
Anyway, I think agreement be quickly be reached - probably before the Ocado Retail trading update in late March.
Ocado say they will treat Ocado Retail as an investment from April next year. The consequence of this will be that from that point Ocado Retail will basically come under a M&S remit. Assuming the business is in good shape by then, I think we will see a rebranding of Ocado Retail to M&S and probably an agreement to sell the other 50% to M&S with an extended payment period of maybe 5 years.
Its good to see a return to profitability at Ocado Retail - underlined today by excellent results from Ocado Group.
The following is very relevant for MKS shareholders -
Deconsolidation of Ocado Retail - from Ocado results.
"Ocado Group plc and M&S are both joint equal shareholders of Ocado Retail Limited. At present the results of Ocado Retail Limited are consolidated into the results of Ocado Group plc as Ocado Group plc are deemed to be the controlling shareholder via certain tie-breaking rights. Our current intention is to give up those tie-breaking rights to M&S in early April 2025. There will be no change in the economic interest of both shareholders in Ocado Retail Limited, or any consideration paid by M&S, as a result of this proposed change. After giving up the tie-breaking rights to M&S, we expect that the results of Ocado Retail Limited will cease to be consolidated into the results of Ocado Group plc and will instead be equity accounted for as an investment from this point onwards. From this point, M&S would have the right to consolidate the results of Ocado Retail Limited pursuant to the terms of the original Shareholder Agreement signed in August 2019 when the Joint Venture was formed."
I guess there is a good chance that some of these pioneer projects will need some Ceres kit at some stage as they progress.
Although the number one commercial opportunity in the UK still has to be converting wind power to hydrogen for storage and use by heavy industry, or back to electricity again for the grid.
In my assessment Ocado is well into recovery mode with Solutions starting to show much improved income and Ocado Retail back into profit.
I am quite sure that we will see a good rebound in the SP when the groups results are published on Thursday, followed by another leap up when we see the Ocado Retail trading update on March 26th.
A nice surprise this morning, and its a good one.
Trading inline with expectations, continued steady growth and a strong balance sheet with plenty of cash in the bank.
Also don't forget that Solutions income is increasing all the time as new CFC's come online around the globe and others gain capacity - the amount of increase here is the big unknown and has the capacity to surprise the market.
I guess agreement will come at some time between now and August.
Clearly Ocado Retail is being squeezed on margins at the moment and still has some excess capacity but the future is still bright for the business.
Its also fair to point out that M&S are doing much better out of the partnership than is evident from the numbers.
They are making profit on their own label products sold by Ocado Retail and also gaining on economies of scale for their own label products - this is also one of the main reasons why failed JLP Waitrose have crashed and burned.
Around 450p would simply be the recovery SP for CWR.
Good news in the future moves it much higher.
Remember the business model is licencing deals - the cash from licencing quickly becomes profit - the R&D has already been paid for over the years that Ceres has been trading.
UBS started coverage of CWR today with a Buy rating and price target of 450p.
Explains todays rebound in a moribund market.
As we all know, even the detractors, the SP is simply being mullered by sentiment - the potential here is still as good as it was when the SP was over 1000p.