Member Info for chilting

Just a quick dip into yesterdays modelling seminar.

Ocado Group able to fund 10 new CFC's per year from cash flow, without the need to raise new funds, and may even show a profit.

Ginandmilk
I don't think news from Tissue Regenix will make much difference at the moment.
The whole market is being held back by the poor macro, especially the inflationary pressures.
I think that the SP will continue to flat line for the foreseeable future until we get some green shoots.

It seems unlikely that Tissue Regenix will need to raise funds, therefore, its just a patient waiting game for investors, without danger of dilution.

Yes, there is certainly progress by the SP but the macro is holding it back big time and that's likely to continue for the foreseeable future.
The big danger from investors point of view is if EQT need to raise more funds while the SP is still subdued by the poor macro.
The trouble is that with inflation and the uncertainty that creates, there is no clear answer to that question, therefore the SP remains subdued - Catch 22.
A high proportion of growth stocks are in the same predicament.

More detail emerging of windfall tax to raise £7 billion on oil and gas firms, to be announced tomorrow - source BBC.

https://www.bbc.co.uk/news/business-61584546

As I said the ultra fast model doesn't work, however you try to twist it, the profit isn't there.
It works for takeaway, because its added value and consumable straight away, but stretching it into grocery delivery is one step to far.

I think the ultra fast delivery model could burn out.
It is so dependent on a cheap pool of labour and as competition grows prices are bound to become more competitive for the service offered but at the same time delivery drivers will want more wages or they will move to a competitor.
Also regulation hasn't really caught up with the industry yet - that's bound to push up prices when it does.

The uplift was triggered by news due tonight from the US at 7pm EST re interest rates.

Jimjam
The promotional push in the Chilterns is probably because the new CFC at Bicester is due to open very shortly - they have got to the stage where they are hiring staff.

Valueplay

An important point - have you taken account of the lower capital spend advantage that reimagined will bring on all Ocado Solutions Partnerships?

It could be that Ocado is much better funded to achieve its financial commitments than any of us imagine.

Yes, I would agree with Paul and have now revised down my price target for 2022 from the original 140-165p to 120-145p, meaning that I see more downside.
Actually the trading update that Ocado issued for Ocado Retail this morning was more realistic in tone than the M&S results announcement.

I have no intention of selling as I am still well up, but the shares are no longer a buy because I think the market probably has further to fall.

I don't see MKS as a standout takeover target but I guess anything is possible.

The problems with RNS this morning meant some reports were missed earlier - this info was published twice.
if you missed this update from Ocado, re Ocado Retail, its worth a read.
Its very informative without any gloss.

https://www.lse.co.uk/rns/OCDO/ocado-retail-trading-update-xac46besb5qrv6k.html

Personally, I would vote firmly against any takeover approach.
It would certainly give shareholders a windfall but at the cost of a substantial long term gain in say 5 years time.

Its not all negative...
Ocado Retail are doing very well at pushing up customer numbers as more capacity is rolled out.
They are basically working harder and spending more, but profits will be down because of the economic conditions.
Much like most of UK retail at the moment - my business included.

Yes, there is nothing contrarian about MKS - this is a very solid buy for any long term investor - especially at these levels.

Shorts having a field day as negativity is highlighted by the media.

It looks like the shorts decided to attack whatever - OCDO down as well.

From an Ocado point of view the big take from the MKS results this morning is that M&S are investing more in Ocado Retail to increase capacity at the expense of taking profit.

If this stance is repeated by other Ocado Solutions partners then we could see Ocado riding this recession much better than expected.

It looks like the market in general will open higher this morning, so that should give MKS a lift as well.
The results are very good and the outlook is OK - no news of a dividend though.

Neil
I have been down 95% on ITX and seen it bounce back.
Being down just 50% with OCDO is no problem and is par for the course with growth shares.
What goes around comes around, patience is the key.

Yes and the figures are probably still distorted by the pandemic, but Kantar do seem to have credibility and they are widely quoted, hence the post.
I guess the actual report is behind a pay wall, all we see is prepared media quotes and the summary.