The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
And who would listen to a government and MPs receiving a 2.7% increase?
https://inews.co.uk/news/politics/mp-pay-rise-2022-politicians-salary-increase-uk-tax-rises-energy-bills-1492279
Yes, that always puzzles me too. With most spreads it's always blindingly obvious whether a transaction is a sale or a buy.
Yeah, no one's convinced, though, as the share price keeps confirming.
If I sit any tighter gangrene will set in :D
Disappointing that, after yesterday's big buy which was recorded after closing, the SP didn't open higher this morning.
It'd be nice if it was a PDMR ;)
Yep. I think brokers' stock screens are generally pretty amateurish in their presentation of figures. HL can't even make the daily gain/loss of a share tally with the daily gain/loss of one's holding of that share. As I type they're showing that the price is up 2.68% for the day, but my holding value has only increased by 2.64%. Basic programming.
While these CFCs could become a major revenue generator for the group by the end of the decade, (customers will pay capacity-linked fees when they’re in operation) the high cost of getting them up and running is weighing on Ocado’s bottom line.
Capital spending has quadrupled since 2018 and could rise even further this year. Last year, spending totalled £680m as it ramped up spending ahead of what has been described as a “crunch year” in 2022. By the end of this year Ocado will be managing 12 live CFCs, up from four at the start of the year. A further 19 are in various stages of construction.
Capital requirements are growing and so are losses
With £1.5bn of cash in reserve, it’s clear Ocado will need to return to the capital markets in the near future as it pushes forward with new CFC developments.
Analysts believe it will tap the debt markets for more funding either this year or next, although with the cost of borrowing only set to become more expensive, the group needs to act quickly.
While Ocado is facing slowing growth at its retail arm and growing demands for cash from the tech side of the business, it’s also having to fight legal battles around the ownership of its technology.
Norway-based Autostore has claimed that its grid-based technology formed the basis of Ocado’s CFC platforms. The two parties have been slogging it out in the courts for years with Ocado spending £28m on legal bills in 2021 alone. It looks as if this fight will continue for some time.
Considering all of these challenges, it’s no surprise that the Ocado share price has slumped more than 60% since December 2020. Now the pandemic is in the rear view mirror, the market is focusing on the risks ahead.
Refinitiv analyst estimates have the company losing £316m in 2022 and £251m by 2023. Even the most optimistic analyst projections don’t have profits arriving until the end of the decade at the earliest. In the meantime, Ocado is going to have to continue to tap investors for funding to support its capital spending and legal battles. Despite the firm’s technological prowess, investors might want to sit this one out.
2/END