Ocado CFO Duncan Tatton-Brown will step down

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Ocado CFO Duncan Tatton-Brown will step down from his role in November after eight years in the job.

Ocado announced its long-standing CFO will leave his role “due to family circumstances” on 22 November and will contninue as a non-executive director.

He will be succeeded by Stephen Daintith who is currently CFO of Rolls-Royce Holdings

Ocado said Daintith had managed a significant turnaround of the business at Rolls-Royce and “has a deep understanding of international business across various sectors”.

He has also previously worked in senior roles at Daily Mail and General Trust, Dow Jones and News International.

“His experience internationally and in engineering and manufacturing will be very valuable additions as Ocado continues its growth as a leading technology-led global software and robotics platform business,” Ocado stated.

CEO Tim Steiner commented: “Duncan joined us in 2012 when Ocado was a very different business to what it is today. He has made a critical contribution to our growth as a company and the successful execution of our strategy. As importantly, he has been a highly valued colleague to us all and we will miss him.

” Following a thorough search and selection process, I am delighted to be welcoming Stephen to Ocado Group. Stephen has a wealth of valuable experience and I am looking forward to working closely with him to drive Ocado forward and take full advantage of the opportunities that we see ahead.”

Tatton-Brown added: “I have enjoyed my time at Ocado tremendously. This is an amazing business with huge growth opportunities ahead of it. Family circumstances, however, mean that this is the right time for me to step down from my role. Ocado now has the financial capital required to take advantage of the global acceleration of online channel shift. I will remain on a number of boards connected to Ocado and so I am fortunate that I will continue to have a front row seat in the extraordinary journey Ocado is on.”

Daintith commented: “I am delighted to be joining Ocado Group at such an exciting time. Ocado has become established as the partner of choice for the world’s leading grocery retailers, offering a scalable and sustainably profitable solution that provides their customers with the best online delivery experience. I look forward to playing my part in ensuring the continued success of the group in the years ahead.”

Ocado shares are up 0.3% to 2,543p on the news.

Morning update

Beauty and nutrition brand The Hut Group has posted an intention to float document to list its shares on the London Stock Exchange.

Should it proceed with the IPO, it intend to sell at least 20% of its shares raising around £920m and giving it a pre-money equity valuation of £4.5bn.

It said the IPO would further support THG’s growth plans by increasing THG’s public profile and brand awareness as well as providing a base of long term shareholders whilst also providing potential liquidity opportunities for shareholders.

Matthew Moulding, founder, CEO and chairman of THG said: “Our intention to float THG on the London Stock Exchange reflects the achievements of the past but also our strong belief in the significant potential for THG in the future.

“THG has enjoyed strong growth since being founded in 2004, employing more than 7,000 people and establishing a track record of consistent delivery for our customers. The brands we own today give us leading strategic positions in prestige beauty and nutrition, powered by Ingenuity, our differentiated proprietary direct-to-consumer e-commerce solution.

“Ingenuity powers not just our brands but those of many other leading consumer brand owners around the world creating a highly resilient, vertically integrated business with significant growth opportunities.”

In 2019 the group posted year-on-year revenue growth of 24.5% to reach £1.1bn with adjusted EBITDA of £111.3m.

During the year ended 31 December 2019, more than 610 million visits were made to websites on the THG Ingenuity platform and more than 80 million units were dispatched using its infrastructure.

Additionally, over 1,000 brands were retailed through the THG Ingenuity platform, generating over £1.1 billion in net revenue in the year ended 31 December 2019.

THG is targeting overall revenue growth of 20-25% over the medium term based on a strong growth trajectory in all segments.

Elsewhere, German meal delivery player Delivery Hero has acquired 100% of InstaShop, one of the largest online grocery platforms in the Middle East and North Africa.

The initial purchase price amounts to approximately US$270m and the size of the deferred component to the founding team is dependent on the growth and profitability of the business in the following years.

Delivery Hero said the deal will complement its position in grocery delivery and emphasizes the importance of q-commerce – the next generation of e-commerce.

InstaShop was launched in June 2015 and is based in Dubai. The company generates gross sales of approximately US$300 on an annualized basis, up 330% year-on-year, and a positive EBITDA margin. With Delivery Hero’s support, the plan is to launch new markets and invest into further growth.

Niklas Östberg, CEO and co-founder of Delivery Hero, said: “I’m delighted to welcome InstaShop to the Delivery Hero family. The InstaShop team embodies our values and brings a strong vision and capabilities.

“As a leading player in the grocery segment, InstaShop has built a service customers love, and their expertise is a great addition to our quick commerce expansion. Together, we will continue to invest to drive the future of delivery by pushing the standards for speed and convenience.”

Meanwhile, Delivery Hero’s increased revenues significantly by 93.7% in the first half on a year-on-year basis to €1.13bn.

After the easing of lockdowns and curfews in many countries during the second quarter, the company’s business activities resumed their growth trajectory. In terms of profitability, gross profit was broadly stable year-on-year, coming in at €167.2m compared to €168.3m in the previous year, despite lost revenues and their corresponding profit contribution from the MENA segment due to COVID-19-related restrictions.

Based on the strong operative performance in the first six months of the current business year, Delivery Hero expects continuous growth also in the second half of 2020.

Guidance on total segment revenues has been raised to between €2.6bn and €2.8bn for the full year 2020, up from €2.4bn to €2.6bn.

Meanwhile, UK consumers have grown more comfortable with returning to the shops, according to the latest EY Future Consumer Index.

The index found that comfort levels with traditional shopping behaviours – such as going to a shopping mall and trying on clothes or going to the grocery store – have all more than doubled since May.

Consumers comfortable going to a shopping mall has risen from 15% in May to 36% in July, and those comfortable trying on clothes has risen from 8% to 19%. Similarly, in May, 25% of UK consumers said they felt comfortable shopping in a grocery store, and in the July EY Future Consumer Index, that figure rose to 56%.

The survey of over 1,000 UK consumers found that UK consumer behaviour is changing as the pandemic progresses. Over the longer term, 56% intend to shop less frequently but spend more when they do shop, while 69% say they will be more mindful of hygiene and sanitation when shopping in person.

Silvia Rindone, EY UK&I retail partner, commented: “Retailers must be given credit for the active role that they have played. Consumers are much more hygiene conscious when they physically go shopping, and retailers have worked hard to respond by ensuring a variety of measures are in place to enable a safe shopping experience. This approach, taken together with bolstered online offerings, is clearly working, as the latest ONS figures show retail sales volumes have returned to pre-pandemic levels.”

On the markets this morning, the FTSE 100 has edged down 0.2% to 6,033.5pts.

Early risers include Bakkavor, up 4.1% to 64.6p, PayPoint, up 2% to 655p and Compass Group, up 1.6% to 1,180.5p.

Fallers include McColl’s, down 4.4% to 26.1p, Naked Wines, down 3.5% to 446.2p and FeverTree Drinks, down 2.3% to 2,065p.

Yesterday in the City

The FTSE 100 ended the day edging up 0.1% to 6,045.6pts yesterday.

Risers included WH Smith, up 8.2% to 1,128p as Goldman Sachs gave it a buy recommendation on its cost cutting measures and hopes of increased customer numbers.

Also on the up were Pets at Home, up 1.6% to 298.8p, Ocado, up 1.4% to 2,535p, Reckitt Benckiser, up 1.3% to 7,648p and Naked Wines, up 1% to 462.5p.

Fallers included Bakkavor, down 5.1% to 62p, Diageo, down 2% to 2,548p and Fevertree, down 1.1% to 2,114p.