© Reuters.
Scott Kanowski
Investing.com — okado group PLC (LON:) plunged to a worse-than-expected annual loss as its online retail joint venture faced pressure from rising costs of living and warned shoppers were cutting back on spending.
The digital grocer reported a loss before interest, tax, depreciation and amortization of £74.1m (£1 = $1.2035) for the 2022 financial year, from a profit of £61m in 2021. 59.2M.
It was up 0.6% over the period, but below expectations. This is partly due to the weakness of Ocado Retail, his joint venture with Marks & Spencer of the supermarket chain. Business turnover fell by 3.8% to £2.2 billion, while his share of the online grocery market increased slightly from 11.7% to 12.3%.
Chief Executive Tim Steiner said in a statement that Ocado Retail is going through a “challenging” year when many customers ordered fewer items due to rising input costs and soaring inflation in the UK. Demand has also started to ease following the boom in e-commerce during the pandemic, Steiner added.
“As the coronavirus pandemic subsides and customer growth continues, the business will begin to recoup the fixed costs of recent capacity commitments,” Steiner said.
Ocado Retail top-line growth projected to recover from tough comparisons caused by surge in shopping traffic during Omicron-impacted period in early 2022, expected to grow mid-single digits this year will be Capital investment is expected. Up to £550m will be withdrawn, at least £250m less than last year.
Core earnings for the full year are expected to be ‘slightly positive’, remaining negative in the first half and recovering in the latter six months of 2023.
Ocado shares fell more than 9% before Tuesday’s European trading open.