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Seems now that there will be restrictions preventing most overseas summer holidays this year. Significant cost saving for a lot of people as they holiday in the UK instead. I can see many splurging on champagne etc having emerged from the lockdown period.

On one camping holiday I ordered an Ocado delivery to the campsite. It certainly brightened up the trip and was so convenient. Can see others doing the same. Ocado retail sales figures should look very healthy for an extended period from now. Lockdowns elsewhere around the world, France etc should drive overseas sales higher and increase those who switch to online grocery as their method of choice for shopping over stores.

Of course it could change but with US treasury rates falling during Asian trading hours and Nasdaq futures currently up it looks like a good day for the tech sector today...

Yes. Kindred solutions were bought to solve this issue. Tim Steiner outlined at the time of that purchase the difficulty for example of employing human packers at odd hours of the night in Canada's sub zero temperatures. Automation of that part of the jigsaw will bring great benefits.

The automated packing ability is to be sold as as add on to the existing CFC contracts so should be another extra revenue stream in the years to come.

It's an evolution. Ocado have started out for many years as a retailer then seen the opportunity to lead the global market in online grocery software development. Few companies totally change sector. Tesco even rewrote their management pay incentives to exclude Ocado as a comparison as it had become a technology company, no longer a retailer

https://www.bbc.co.uk/news/business-52659193

No "excuses" are necessary here. What's needed is more of the same. Ocado are at the forefront of immense change within the industry. Declaring an overall group profit is not what is required at this time. Staying ahead of the competition via reinvesting is crucial at this juncture.

Ocado could have declared big profits a long time ago. They could have simply remained as a very successful online grocery retailer banking big profits yearly. That path would have taken them to being a £3bill market cap company today.

Instead of that they reinvented themselves as they saw a huge opportunity to be online grocery software development global leaders. A huge yearly investment in tech has brought them huge contracts with grocers in all corners of the globe.

As a result of changing tack and foreseeing the changes in the industry they are now worth £15bill and have an immensely more optimistic outlook ahead of them than if they had just remained as a good online grocery retailer.

Precisely shaggers. If Ocado hadn't reinvested everything they would be where Waitrose online is now, which is nowhere, a sub £1bill company.

To someone who doesn't understand Ocado it is quite shocking.

To those that have been shareholders for 3 years+ and have received 600%+ share growth it is not new information.

They make a profit on their retail side and invest it back into the solutions side of the business.

shaggers, exactly.

If Ocado rested on their laurels. Did not invest to further sharpen and improve their tech to be world beating and declared an overall profit tomorrow then I would sell my shares immediately.

What I want Ocado group to continue to show is that they are committed to continue developing and improving their world beating technology in the online grocery space and outside it in time. As they further build an advantage over the competition then more contracts will follow. As more contracts follow economies of scale occur so costs are reduced.

The size of the opportunity is absolutely huge 5 years+. What Ocado has done in 21 years is extraordinary. Morphing from a small online grocery retailer to a world leading software/robotics development company for the online grocery market. Now having 7 international grocery groups as customers. One of which is America's largest supermarket by revenue.

Super exciting phase at the moment as the CFCs open around the world and the tech continues to prove itself around the globe.

Ocado invest the profits of their profitable retail side into further improving their Ocado solutions technology. The big profits for Ocado group are 5 years+ into the future.

Ocado's tech needs to be the best to further win market share. The size of the online grocery market currently is small. In the future it will be far larger. Ocado want to be the best in 5 years time not simply rest on their laurels declaring profits and being the best now.

Are you referring to the 40m sell edtheeuph? If so that's an uncrossing trade, trade type "UT". Ignore that, it's just a bookkeeping entry tallying the sells v buys of the day. It's not a real trade

At Erith CFC I think Ocado retail are processing 150,000 orders and Morrisons the other 70,000. Think they've misinterpreted it in the article below

Ed, below should answer your questions..

httpss://www.sharesmagazine.co.uk/news/shares/ocado-pulls-back-as-rapid-lockdown-growth-slows

"In terms of capacity, which stymied growth last year, the Erith CFC (customer fulfilment centre) is now processing 150,000 orders a week – a third of which are Morrison slots, it should be said."

Many buy/sells are traded early in the day and booked in later at the end of the day.

Pls pass on my best to Tim and say a new overseas Ocado Solutions contract would be lovely x

That was the article I quoted shaggers :o)

Yes, Amazon's threat is driving Ocado solution sales it has done so since they bought into Wholefoods.

Tim has outlined this before. Tim is right in both instances in that it is a small competitor currently.which will be a large one in 15/20 years time.

https://dnnra.igd.com/retailers/ocado/news/news-article/t/ocado-sees-amazon-as-biggest-threat/i/8215

Stripper,

Ocado have said they have received more demands for ramped up extra capacity across all their existing overseas client due to the pandemic. The pandemic has pushed the online grocery market 5 years further ahead than it would have been without. Tim has said this, as have many others. There has been vast take up by consumers over the last year across the globe re online grocery. Once they move to the channel the majority stick to it.

Post pandemic there is vastly more opportunity for Ocado than prepandemic as grocers are far greater focussing on online. They need solutions to their, in the main unprofitable, current online setup (especially with the Amazon threat looming in multiple geographies). Ocados solutions are proved over a number of years and are best in class. Once travel restrictions lift they will make good headway on more contracts.

Good points Treacle24,

Ocado's half of the Ocado retail venture with M&S is worth around £1.5-1.75 bill. Ocado's market cap is £15 bill. Ocado is vastly more a tech company than a retail one.

Yes there is secrecy around the terms of their Ocado solutions contracts. That's entirely understandable but does require one to use some guesswork regarding the economics of the revenue stream that will come flooding into Ocado group in the future.

Tims has a huge bonus due at around £42. He's rum everything very astutely so far. Raising £1bill mid last year when funding wasn't needed but he saw a chance to lock in funding at a very low rate. He did the same also when he raised an extra £100m on top of the Aeon Japan fundraise in 2019 because demand was strong and locking in extra funding was valuable for stability. His bond trader background driving and informing these successful market moves.

There's a lot more going on that's under the radar of most investors. Ocado have a controlling stake in the largest vertical farm in Europe. They are ramping up it's expansion using robotics to take freshness to a whole new level and further differentiate Ocado Solutions offering.

Having bought Kindred systems late last year they now have 2 multi billion dollar US clothing companies as clients. Huge potential to move further into that space and streamline non grocery warehouses using their cutting edge robotics.

Also stakes in robotic chef company (Karakuri), click and collect robotic company (Myrmex). Investments in drones, hyperloop delivery.

So much happening, as this ecosystem builds out it will take Ocado into many more markets/directions.

Agreed Treacle24,

You'll find many others come out of the woodwork when Ocado takes any kind of stumble. Many look simply in terms of profits, dividends etc.

The potential growth for Ocado is huge. Some see it, some don't. Many hate to see success and rue the huge price rise they've missed out on.

Numis released a buy recommendation on Ocado shares yesterday after the trading update. I can't locate their price target.

https://www.marketbeat.com/instant-alerts/lon-ocdo-a-buy-or-sell-right-now-2021-03/