Britain’s Ocado raises earnings outlook again on strong trading

The spread of the coronavirus disease (COVID-19) in East Grinstead

LONDON (Reuters) – British online supermarket Ocado Group raised its core earnings forecast for 2019-20 for the second time in two months on Thursday as the COVID-19 pandemic continued to generate huge demand for home delivery.

Ocado forecast full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of “over 70 million pounds” ($93 million) versus a previous forecast of “over 60 million pounds”. EBITDA in 2018-19 was 43.3 million pounds.

The group, whose shares have soared 82% this year, said revenue at its retail joint venture with Marks & Spencer rose 34.9% to 579.6 million pounds in its fourth quarter to Nov. 29.

Growth moderated from 52% in the third quarter, which Ocado said reflected seasonality.

Average orders per week rose 3% to 360,000 and average order size was 133 pounds.

In September the Ocado Retail venture switched from using Waitrose to M&S products.

“Customers continue to embrace the full M&S range with the biggest selling lines coming from everyday essentials in the M&S fresh categories,” Ocado said.

Online grocery shopping has doubled its share of the UK market to nearly 14% since the start of the pandemic and Ocado reckons it could reach 30% over the next few years.

(Reporting by James Davey, Editing by Paul Sandle)