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Summary
- Ocado Group plc has upgraded its EBITDA forecast for the year of 2020 on the back of the continued success of its joint venture Ocado Retail Ltd, a joint venture of Marks & Spencer and Ocado.
- Since the launch of the joint venture, the platform has been witnessing high customer traffic.
- Online retailing platforms, especially the ones dealing with grocery, have seen tremendous success this year on the back of the pandemic.
Riding on the success of its joint venture Ocado Retail ltd, Ocado Group plc has upgraded its EBITDA guidance for 2020. The company, which has been on a roll since it collaborated with Marks and Spencer Group last year, is now the world’s largest dedicated online grocery company.
Ocado retail currently operates Ocado Group’s flagship website Ocado.com, besides it has two more brands -- Fetch, a store for pets, and Ocado Zoom, which is a one-hour grocery service.
Ocado currently has nearly 250,000 active customers and a 15 per cent share of the UK’s online grocery market.
The latest trading statement
The company came out with its latest trading statement on 10 December. For the quarter ending on 29 November, the company reported a retail revenue of £579.6 million compared to the retail revenue of £429.7 million in the corresponding quarter in 2019, registering a growth of 34.9 per cent.
The average weekly orders received during the period were 360,000, which is 3 per cent higher than the average weekly orders received by the company in the same quarter in 2019. The company has now given a full-year EBITDA guidance of £70 million, whereas in November it has stated that its full year EBITDA would be more than £60 million.
The Joint Venture
In February 2019, Ocado group plc joined hands with M&S to set up a joint venture -- Ocado Retail Ltd, in which the latter acquired a 50 per cent stake for £750 million. The joint venture, which launched its operations on 1 September, has seen record growth in sales in the last few months.
The stock markets also rewarded Ocado Group plc for this stupendous performance on Ocado Retail ltd and sent its market capitalisation soaring to £19.5 billion in the second week of September, which was second only to the largest retailer Tesco’s market capitalisation of £21.5 billion.
Share price performance
(Source- EODHD/Others, Thomson Reuters)
The shares of Ocado Group plc (LON: OCDO) closed at GBX 2,159.00 per share on 10 December. The stock holding a market cap of GBP 16,152.86 million has given a return of 80.29 per cent in last one year.
