Ocado has moved into the black, reporting a half-year profit of £7.5m, while sales rose by 15.6%.
Profits at the online grocery business were up from losses of £3.8m at the same time last year, while gross sales grew by 15.6% to reach £442.4m. That sales figure included a £20.3m contribution from its agreement with Morrisons . Ocado helped Morrisons launch its online grocery business in January through the use of its technology and fulfillment capacity. That service, Ocado said in its statement today, is “ramping up smoothly”.
Ocado said it had continued to invest in capacity and the in-house development of its software during the half-year, with an IT systems replatforming project and next generation fulfillment “progressing well”.
It said its specialist online pet store, Fetch, was growing “at a significant pace” and that it would launch a specialist cookshop, sizzle.co.uk, in the second half of this year.
Ocado chief executive Tim Steiner said Ocado had outperformed a market that was itself outperforming bricks and mortar growth. However, the market as a whole was affected by “subdued and cautious consumer spending”.
“The first half of the year was very busy for us as we continued to improve our proposition to customers, including the further expansion of our range and improvements to the user interface,” said Steiner.
He added: “The successful launch of Morrisons.com was particularly encouraging and paves the way for future agreements to commercialise the value of our intellectual property. We continue to invest to take advantage of partnership opportunities in the future as the demand for online grocery shopping increases internationally. Our IT projects to improve the platform and increase fulfillment capability are progressing well and position us to benefit from these future opportunities.”
The company said Ocado’s range was now extended to 35,000 stock keeping units (SKUs), with 8,000 more offered at Fetch.co.uk, while order accuracy improved to 99.2%. Sales of own-brand Ocado products rose by more than 50%.
Meanwhile, the company said efficiency at its Hatfield and Dordon customer fulfillment centres had improved and that it was now planning a further fulfillment centre, in Andover, Hampshire, with work due to begin in the second half of the year.