The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Mapper,
Generally the problems are that the online grocery shopping growth figures are currently falling further behind the bullish estimates of the past. Ocados share price is based on the expectation of huge growth and profits gained from many more deals overseas. Currently though Ocado retail growth is very slow and new deals are not occuring as quickly as predicted by analysts
Online grocery shopping will be increasingly popular 10 years from now. The problem for instacart and Ocado is can they sustain the huge losses in these current years in order to get to a brighter future. Many companies fail before they get to see their ideas / predictions being fully realised.
Mapper,
"Looks like Instacart going to suffer again today in US. They use the store pick model for food deliveries like Uber, Gorilla and Deliveroo. Not much competition for Ocado in US."
So far today Instacart shares +0.23%, Ocado down -18%...
Cureboy,
FYI Exane are a subsidiary of BNP Paribas, the largest banking group in Europe. They are a key part of the European investment banking industry. Of course if you believe their research is wrong then there's a nice buying opportunity for you now...
Https://www.reuters.com/world/uk/ocado-shares-slide-after-exane-downgrade-2023-09-21/
Exane are, rightly in my view, very concerned by the growth prospects of Ocado. The recent Ocado retail results were poor. Customer numbers increasing only 1% despite more CFCs being open this year compared to last. The customers Ocado retail has are buying less goods than previously, a trend that has goes back many months. Ocado retail is the showcase for the company, the shop window to entice other overseas clients to jump onboard. Currently it is significantly underperforming.
New contracts for Ocado Solutions have been extremely slow in materialising. Costs will be rising and inflation remains sticky. Oil prices increasing adds more pressure to Ocados delivery model. The takeover talk was simply hot air so that price rise bubble is now deflating...
Average basket size at Ocado retail is still falling when adjusted for inflation. Ocados average basket size increased 4.2% year on year, Ocados grocery inflation is 8.4%. Net result = overall basket size shrinkage of -4.2%.
Ok well you are focussing on a part of the half year report but Avocet is completely correct in that Ocado is still posting losses. Can't accuse him of not paying attention lol.
Re the trading statement tomorrow yes EBITDA should improve. I believe the market will be disappointed with the trading statement tomorrow, margins will be under pressure due to the grocery price cuts Ocado has been conducting to gain market share and overall costs will worry the market.
Avocet is correct re the previous losses. Extract from Ocados recent half year report below:
"Group EBITDA of £17m is offset by depreciation & amortisation and exceptional items to give a loss before tax of £(289)m"
It's yourself who needs to read the H1 report Phoenixy...
Yes chilting, I believe that Ocado Solutions are currently actively looking for new partners. In all the results releases, interviews etc I have seen Ocado management when questioned on this issue are keen to point out they are actively looking for new contracts and are in discussion with potential new partners.
Tim Steiner has consistently spoken of the ability to sign up more partners quicker after the improvements in their latest technology.
Well said chilting. Luke Jensen has been a key mastermind in building Ocado into the company it is today. Great talent. The timing of his move suggests that there are no imminent new partner deals in the pipeline since he is the key negotiator for Ocado.
I'd say this reduces the likelihood of an imminent takeover of Ocado group. Luke Jensen would have stayed to cash in his huge share options if he thought a takeover was occurring soon..
________________________
Ocado Group plc today announces that Luke Jensen has notified the Board of his intention to retire and will step down from the Board as Executive Director and CEO of Ocado Solutions with effect from 30 September 2023 to focus on external non-executive director positions. Luke has been CEO of Ocado Solutions since 2017 and a member of the Board since 2018.
During his time at Ocado, Luke has played an instrumental role in building the Ocado Solutions business globally. From signing the first international partnership with Bon Preu in 2017, to the most recent agreement with Lotte in Korea, Ocado Solutions is now partnered with twelve of the world's biggest and most exciting food retailers whose online businesses are powered by Ocado's technologies, delivering the best customer experience for grocery online with superior economics.
The Company further announces that John Martin, current Non-executive Director at Ocado will be appointed as CEO of Ocado Solutions on 1 September 2023, allowing a period of time for a thorough handover from Luke Jensen before he retires at the end of September 2023. On appointment into this role, John Martin will cease to be a member of the Board and will step down as Chair of the Audit Committee and as a member of the People Committee.
Tim Steiner, Chief Executive Officer of Ocado, said:
"Over the last six years, Luke has played a key role in our transformation into a global technology solutions business. He leaves our Solutions business in a strong position to drive future growth, having recently established a global regional structure, with the appointments of regional presidents and the creation of a global Partner Success organisation. We wish him well and thank him for his contribution to Ocado. Luke will be supporting the transition over the coming months."
Rick Haythornthwaite, Chairman of Ocado, said:
"I would like to thank Luke on behalf of the Board for his valuable contribution to the Company, the Board and Ocado Solutions. I am delighted that John Martin will step into this role to deepen further the support of our clients as well as help shape our strategic direction and performance culture. John has extensive strategic, operational and financial management experience of running large international businesses. The Board believes he is the right successor to Luke with the required credentials to build on a strong foundation."
Commenting on his decision to step down from the Ocado Board, Luke commented:
"I am proud and honoured to have played a part in the transformation of Ocado from a UK retail company to a global leader in technology solutions. With the roll-out of its latest innovations underway, Ocado is better placed than ever to support its partners to win in their mar
Mapper,
Ocado group EBITDA in the recent half yearly results was £17m (£820m your prediction). The current share price is half your predicted £15. In some years to come maybe your prediction will come true but not this year IMO.
The latest results were a big improvement for sure. I've posted previously acknowledging that. Impressive for example that Ocado retail average basket items are not reducing. Big issues both yourself and I did not predict are the heightened takeover hopes that account for a decent rise in the current share price. Also the £200m payment from Autostore. Huge inflow of funds at a critical juncture as Ocado faces heightened costs.
Hope it continues to be profitable for you. Currently I'm focussed on the profits I'm making elsewhere. Always interested in Ocado. Ocado is certainly a lot more attractive as an investment currently..
Casapinos, The latest results surprised me, they showed encouraging signs, a departure from the run of recent results til then. End of Autostore hostilities is another plus, £200m very useful funds for Ocado and the whole process vindicates Ocados strong repudiation of Autostores claims from the beginning.
I'm not invested in Ocado currently, am fully invested elsewhere, however I am always looking over Ocado.
Best to all
(Nedre Vats, 22 July 2023) - AutoStore Holdings Ltd (AutoStore, OSE:AUTO) and
Ocado Group (Ocado, LON:OCDO) announced today a complete settlement of all
claims between the companies in their global patent dispute, avoiding further
litigation and associated costs.
The principal terms of the agreement are:
? All patent litigation claims withdrawn globally
? Mutually beneficial global cross-licence of each other's pre 2020 patents
? Both companies can continue to use and market all their own existing
products without challenge
? Ocado retains exclusive rights to the Single Space Robot
? AutoStore will pay £200 million to Ocado in instalments over 2 years
Whilst the agreement gives both companies access to parts of each other's patent
portfolios for them to use or develop their own products, it does not provide
for collaboration or technology assistance between the companies or access to
actual products.
The other terms of the agreement remain confidential.
Tim Steiner, CEO of Ocado, said: "I am pleased we have been able to settle the
disputes in a constructive and collaborative manner. We can now each move
forward and concentrate on providing our partners with world beating
technology."
Mats Hovland Vikse, CEO of AutoStore, said: "We are glad to have achieved a
resolution that gives both companies opportunity and freedom to commercialize
our extensive patent portfolios. This settlement resolves our differences and
allows us to continue focusing on our respective business goals."
Will be another disappointing results release tomorrow imo. Further basket size shrinkage at Ocado retail. Lower market share. More losses
Re Ocado Solutions I expect costs to be higher than expectations. No new customer sign up news. Some delays in grocers building out their CFCs pushing potential profit point further into the future.
The Amazon takeover rumours have been circulated many times over the years. Personally I can't see it happening this time. Macroeconomic conditions still very much against Ocado. Driving up costs rapidly across the business. Consumers continually switching to cheaper lines. Grocers looking for cheaper solutions, concentrating on their core offering. Ocado retail lagging and losing further market share as I'm sure will be confirmed again in the next results..
Paultokyo29,
Well done on topping up at a great price this morning. I'm a holder. Saw the results this morning and thought they were impressive. Could have been that the market was expecting even better results hence the drop at the open. Anyway this company looks to be still thriving and growing. I'm very happy to keep holding..
Yes, good uplift in Ocado shares performance. The court win gives a stronger foundation for the stocks price. Tim Steiner's recent comments below were a very big positive. Before that there were grave doubts as to Kroger's expansionary aims with Ocado CFCs.
"They are committed to building more, they just want to make those (existing) ones work as well as they can before they roll out loads – very sensible thing to do," Steiner told reporters.
He said Kroger remained "extremely positive" about the relationship, noting he visited the firm last week and will again in two weeks' time.
"They expect to have loads of these warehouses. But when you do something new, you need to make it work really well before you scale it up massively," he added.