Ocado (OCDO) wonderful offering but questionable business model,are things about to change?
The online grocer has a wonderful offering, much loved by its customers, but the derisory financial returns being delivered after more than 15 years of trying surely suggests the business model, in its current guise, still remains questionable. Hopefully the international partnership is the way forward.
Half year results today showed online sales revenue up 18.2% to £507.7m, the much quoted EBITDA up 11.4% to £38.2m but statutory pre-tax profit a modest £7.2m, which compares to £7.5m in the prior year. Morrison’s recharges and fees contributed £32.4m to overall gross profit of £179.8m (2104: £16.9m on £140.5m). As usual there was a lot positive comment from Chief Executive Tin Steiner and it’s hard to disagree that Ocado does indeed deliver “industry-leading service” to its customers - the Group was voted the Best Online Grocer by Which? Magazine in its members’ Annual Satisfaction Survey for the sixth…