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Are you aware of the scale of the data centres Amazon employ for their cloud computing business?
https://aws.amazon.com/compliance/data-center/data-centers/
Well if you are planning to sell I wouldn't wait too long as it's apparently heading to sub 250!
So on that logic Amazon should stop trying to run an online delivery business alongside their cloud computing services or a video streaming platform?
It's quite easy to cut and paste text from a broker note even if you can't provide a link.
Seen it done countless times on these boards.
Why do you feel someone whose analytic focus is on stocks like Kingfisher, Halfords and Next is best placed to analyse a tech firm selling hardware and software to automate warehouses globally.
They seem like quite different areas of focus to me.
It's like my personal focus is growth stocks mainly in the US as well as unlisted VC funded companies. I wouldn't know where to begin looking at the prospects for a pure retail stock.
To be fair an analyst of UK tech stocks alone would have very little work to do!
Well people are suggesting that Kroger are about to roll back their commitments to Ocado.
The SEC regulated info they are providing to their shareholders confirms they will be continuing to invest in them for the foreseeable.
They are not thinking in terms of 3-6 month business development but planning for the next 20 years.
Also nothing to say about Kroger statement in their latest annual report about 3 weeks ago that they are committed to opening new CFCs.
You keep talking about the spokes closure but are not prepared to engage with counter arguments that for Ocado it's a nothing burger.
From what I can see Kroger set up and ran the spokes to deal with orders from the CFC run by Ocado.
Capacity drawn at the CFC but no Ocado staff or tech at the spokes as it's part of Kroger's delivery ops.
Meant nothing for Rossington and Ocado on the search
Searching Google with the news tab option brings nothing for Paul Rossington although he is often quoted on other companies.
According to TipRanks he didn't make any sell recommendations last week.
https://www.tipranks.com/experts/analysts/paul-rossington
I tend to take what analysts say with a pinch of salt. They will probably get replaced by AI shortly anyway.
Paul Rossington is head of European consumer retail research. For example, last week he issued a buy rating on Kingfisher (B&Q) and covers other stocks like Next.
With this background he may not be best placed to analyse a tech company.
Either way, HSBC couldn't be bothered to send an analyst on the annual results call so they can't be very interested in goings on at Ocado.
HSBC can talk up the competition but the talk in the automation industry has been that warehouses themselves have been slow to automate so their remains a massive opportunity to be exploited.
Well the CFCs ordered by Lotte are being fitted out with it
One of VPs complaints was that the Reimagined tech was not being picked up by partners but when they announced it they said it would not be until the end of 2023 that it would be available for new CFC orders.
This video introducing Reimagined is long but has some interesting content. Specifically the bit about 13 minutes in where they talk about how they set about designing the Series 600 not when Series 500 was still a prototype.
Also according to McKinsey there are 2 big obstacles to warehouse automation. Energy consumption and the need for greenfield sites to accommodate new systems.
The 600 is 80% lighter so takes less power to operate and also the lighter grid required can be fitted to existing sites.
https://www.ocadogroup.com/media/ocado-reimagined/
Yeah would be good to see a more up to date one with the Reimagined tech on show.
Apparently the grids for the hive can now be stacked vertically as they are planning at one of the Korean sites.
Also about 80% of the Solutions revenue is recurring revenue from ongoing fees and the sales cut rather than cash received from development costs.
There is a clear indication in the annual report that they know what have a lot of work to do in terms of getting partners to draw down more modules at existing sites.
I am prepared to give them the benefit of the doubt in trusting that they can make progress with that.
The current SP is a more attractive point to take that bet than earlier this year. For a long term hold that is.
Also with respect to Kroger closing 3 spokes. I think this is actually not that relevant to Ocado.
Ocado run the CFCs and Kroger take care of delivery. From what I can see the spokes are sites set up and run by Kroger to transfer orders made at the CFCs from lorries to delivery vans. So Ocado's involvement with them is limited to despatching orders to them from the CFCs.
The modules at the CFCs will already have been drawn down by Kroger whether these modules are used to fulfil orders within CFC reach or for orders going through the spokes.
You can argue that less spokes could lead to less modules been drawn down at the CFC but I don't think closing the existing spokes will mean a reduction in modules already drawn.
As I understand it Ocado earn from the CFC capacity used as well as in store fulfilment services. They don't have much to do with the spokes.
I am happy to be corrected on this if there's any reference to their tech actually being used at these sites.
All I can see are news articles about Kroger creating jobs in the spoke areas for people to work directly for them.
Just to be clear. The purchase obligation figures don't relate solely to Ocado. They include agreements to forward buy stock etc
Rather than emphasising these figures I was pointing towards their own statement about the likelihood of future CFC orders
In the notes to their financial statement there is a one (note 9) about how the Ocado costs are classed as leases (of the robots).
Their future liabilities to Ocado are recorded as long term debt and seem to be 785m dollars.
From page 46 of most recent Kroger annual report (April 2) detailing Purchase obligations, which are 827m dollars for 2024 dropping to 391 and 360m by 2026.
"We included our future commitments for customer fulfilment centers for which we have placed an order as of February 3, 2024. We did not include our commitments associated with additional customer fulfilment centers that have not yet been ordered. We expect our future commitments for customer fulfilment centers will continue to grow as we place orders for additional customer fulfilment centers".