Continued strong revenue growth and further investments
• Retail revenue increased 12.5% to £659.6 million, gaining market share, due to strength of the offer to the customer
• EBITDA up 2.7% to £45.2 million after gross margin increase, driven by a reduction in unfunded promotional activity, and improved operating efficiencies, offset by cost inflation, impact of Andover CFC opening, and further investment in our platform
• Profit before tax of £7.7 million decreased by £1.7 million, resulting from higher depreciation from Andover CFC opening
• Net debt up to £102.4 million due to significant capital investment in innovation and capacity
• New finance facility in place to support expansion plans (post period end)
Strong growth in customers and orders with brand enhancing service levels
• Order volumes grew by 15.6% to an average of 260,000 orders per week (1H 2016: 225,000), with the highest number of orders delivered in a week reaching 280,000
• Average Ocado.com basket size value declined by 1.4% to £108.45 (1H 2016: £109.94) impacted by the continued uptake of Ocado Smart Pass and reduced multi-buy promotions
• Active customers6 increased 12.7% year-on-year to over 600,000
• Maintained superior customer service levels with on time delivery at 95.0% (1H 2016: 94.9%) and order accuracy at 98.9% (1H 2016: 99.1%)
Focus on technology and innovation to deliver more capital and operationally efficient solutions
• Delivery efficiency improved to 180 DPV (1H 2016: 175 DPV), due to enhancements to routing system and improved customer density
• Mature CFC operational productivity improved to 164 UPH (1H 2016: 159 UPH)
• Mature CFC throughput up over 10% on last year with minimal capital expenditure
• Andover CFC scaling in line with expectations
Progress in utilising our proprietary knowledge through licensing
• Announced first international partnership with a European retailer post period end using Ocado Smart Platform (OSP)
• Continued to enable growth of Morrisons' online grocery business
• New store-pick solution now in live testing with Morrisons
• Further conversations continuing with multiple retailers to adopt our solutions using OSP
• Signed partnership agreement with Dobbies to launch their online garden centre business in 2018
Tim Steiner, Chief Executive Officer of Ocado, said:
"I am pleased to announce another period of consistent customer, revenue and order growth, as well as improved operating efficiencies within our UK retail business. In addition, I am delighted to have announced our first OSP agreement with a European retailer.
"After several years of price deflation in the U.K., we have seen this begin to ease in the period and, when combined with our increasing scale and operational efficiencies, this trend will support the continued profitable growth of our retail business.
"As the channel shift to online advances we continue to gain share in a competitive U.K. market. We expect the trend for grocery shopping online to continue as consumers become more tech savvy and gain confidence in the online services available. Ocado will be a natural beneficiary of that trend thanks to its industry-leading customer offer. We continue to build new facilities in the U.K. in order to meet the increasing demand we see.
"Meanwhile, we have invested further in our platform and innovation to advance our technological leadership, as we continue to grow our technology and engineering teams. With the scaling of our Andover CFC and the store pick capabilities we have developed for Morrisons, we are able to better demonstrate the quality of our platform to current and future international customers.
"Grocery retailing is changing and we are ideally positioned to enable other retailers to achieve their online aspirations. We expect our recently announced international partnership to be the first of many and look forward to helping more retailers provide a high quality service to their customers in this rapidly evolving market."
