Ocado looks set to miss its target of a first international tie-up before the year’s end after failing to unveil news of a partnership in a fourth quarter trading update.
Despite sales rising 15% to £381.6m in the 16 weeks to 29 November - the 13th straight quarter of double-digit growth - its shares plunged more than 6% to 334p as investors were left disappointed by the lack of an overseas deal.
Investment bank Jefferies estimated about 25% of the group’s equity value was based on the licensing potential of its smart platform technology.
CFO Duncan Tatton-Brown told The Grocer the “self-imposed target” was set in February to highlight the board’s confidence in the strength of the platform and its appeal to international operators.”Whether or not it actually happens in 2015 or in 2016 - clearly there is a greater chance of it slipping into next year - we remain as confident as we did before in signing a deal.”
Tatton-Brown added discussions were continuing with multiple parties and defended setting the business a 2015 deadline. “Do I think it was the right thing to say at the time? Absolutely. It reflected our confidence and set out what we should do to our investors. It was our plan, it remains our plan and whether it happens by 31 December or in January is frankly immaterial.”
Total sales for the year rose 17.3% to £1.2bn, with profits to be revealed in the full preliminary results in February. Average orders rose 15.8% to 205,000 a week but average spend dropped 2.3% to £107.16 as the supermarket price war pushed prices down.
John Ibbotson, director of consultancy Retail Vision, said the jury was still out on Ocado. “As an internet grocer it is holding its own in a testing market but as a technology firm its potential is still completely unfulfilled.”