By James Davey
LONDON (Reuters) -Ocado Group, the British online supermarket and technology group, plunged to a worse than expected full-year loss as it took a big accounting charge and profits at its joint venture with Marks & Spencer were wiped out.
The group, whose shares have more than halved over the last year, said on Tuesday it made a loss before tax of 501 million pounds ($604 million) over the year to Nov.
27, 2022. That compared to analysts’ average forecast for a loss of 399 million pounds and a loss of 176.9 million pounds in the previous year.
Group revenue was broadly flat at 2.5 billion pounds.
Ocado Retail, the 50:50 joint venture between Ocado Group and M&S, made a loss of 4 million pounds, having made earnings of 150.4 million pounds in the previous year.
Its revenue fell 3.8% as even its typically more affluent shoppers felt the squeeze from higher inflation and energy bills.
The group pretax loss also reflected a 349 million pounds charge for depreciation and amortisation.
Ocado’s 5 billion pound market capitalisation has been driven by technology partnership deals with overseas food retailers, including Kroger in the United States
Despite the wider loss, CEO Tim Steiner said “we have more confidence in our model than ever before,” highlighting the roll out of 12 automated warehouses for partners around the world in 2022.
“The pipeline for new partners is strong,” he added.
At the core earnings, or EBITDA, level Ocado made a loss of 74 million pounds – also worse than analysts’ average forecast for a loss of 66 million pounds and versus earnings of 61 million pounds in the previous year.
For 2023, the group forecast “marginally positive” EBITDA for Ocado Retail, “positive” EBITDA for the technology solutions division and “stable” EBITDA in UK logistics.
The group ended the year with a cash balance of 1.3 billion pounds
“Our strong balance sheet gives us the means to finance our growth through the mid-term (4-6 years),” added Steiner.
($1 = 0.8300 pounds)
(Reporting by James DaveyEditing by Kylie MacLellan and Mark Potter)
