Member Info for Valueplay

Simply pointing out the enormity of ongoing issues for Ocado currently which have made this share so easy to short.

DYOR

Obvious to be short currently. Overcapacity at Ocado retail. New deals very thin on the ground for Ocado solutions. Cash spend eating into reserves. Kroger and M&S ongoing pause in commissioning new cfcs. Possible legal dispute with key partner M&S..

No reason for shorts to be nervous. The sell off is still in place. Negative issues remain surrounding Ocados major contracts. Slow new partner sign up. New fundraising to occur quicker than most believe imo.

Logical that the sell off continues. More profit for the shorts, rightly so. Capital raise not as far off as most think imo..

Yes, net debt doubled in 2023. Could go even higher in 2024...

Ocado is in 114th position currently

https://www.stockchallenge.co.uk/ftse.php

The thread is about Ocados cash reserves. 443m was spent last year leaving less than 2 years of reserves left at that spending rate. Debt has doubled this year.

Cash raise in around a year's time imo.

It is true that "This year's losses would have been higher than the last were it not for the one off Autostore receipt of funds re legal case settlement."

It's being paid in installments but the whole amount has been taken into account as received. Below is recent FY 23 accounts.

"Loss before tax of £(394)m, taking into account £187m from the settlement reached with AutoStore, an improvement of £107m versus FY22"

I wouldn't say they are a long way off needing more cash. At current cash spend rates Ocado group will run out of cash in less than 2 years from 3rd Dec 2023. Of course Ocado will not run down their cash reserves to anywhere near zero, far too risky. Id say a new cash raise is coming in a years time, could be earlier.

Revenue is building but losses are still very high too. This year's losses would have been higher than the last were it not for the one off Autostore receipt of funds re legal case settlement.

Boyo,

I simply stated that Ocados cash reserves are being depleted quickly and it's debt is rising sharply. Ocados liquidity has reduced £400m since previous year. Of course Ocado will want to raise funds well ahead of needing them. Significant likelihood of another cash raise possibly this year, most likely next year imo.

An except from the latest Ocado annual results released in Feb 2024 as below. Ocado cash reserves are being depleted quickly. Debt rising sharply. When will they next tap shareholders for cash?

"Cash and cash equivalents of £884.8m at the end of the period (FY22: £1,328.0m) and liquidity of £1.2bn (FY22: £1.6bn) (including the undrawn revolving credit facility ("RCF") of £0.3bn). Net debt* at the end of the period was £(1,075.1)m (FY22: £(577.1)m).

£394 mill of losses in the recent Ocado group year end results.

The market will stomach the losses whilst new contracts are being regularly signed. However when the new deals slow then the spotlight focuses on any issues within the company. Currently existing 2 main partners have paused commissioning new CFCs. Theres a costly large overcapacity at Ocado retail caused by overoptimistic expansion. Spokes at Kroger closing. Not an issue for some on this board. A clear red flag for me and others.

Whilst there are no new contracts signed and existing partners are pausing ordering further CFCs then the downwards pressure on the share price continues.

Nice to get an acknowledgement of error from you rather than your previous post of:

"ValuePlay

I have NEVER used the word shallow...and as usual you are making up what you want, rather than using what someone has ACTUALLY said

But that is nothing unusual...and the chances of you recognising that fact are ZERO"

Yes let's move on....

I have discussed Ocado at length with you previously however you've then called my research shallow and categorically deny having ever doing so.

It's pointless discussing when it's obvious the other poster will end things with insults.

I'm short Ocado and of course that puts me in a minority re this board. It also makes me a target for insults as the share price has slumped. When people apologise I understand however most don't inc yourself.

Lol Poker,

I've discussed the closed spokes issue with Sangi countless times. Others on the board were deriding the spokes discussion at length. It's just best we decided to agree to disagree on that one. Going round and round for another 10 posts is pointless.

It's all about DYOR re these issues.

Lol Boyo.

Primarily I carry out my own research however I do find reading all the latest Ocado analyst research insightful.

Lol PI,

Never said that. I have time to post certainly but I can't answer every post directed to me or provide information for others all the time when requested.

We all need to think for ourselves and DYOR primarily.

Fair enough Sanji, Again we differ in opinion and that's fine. Unfortunately I don't have the added time to answer every post / Provide all the information that others request of me.

Personally I always believe DYOR is the best way.

Fair enough Boyo,

I have full access to the latest HSBC research and it most definitely isn't a pile of poo. They've been very on the money over the last 6 months. Can't give links etc here.

As always DYOR.