Ocado delivery

Ocado has moved into the black in the first half of the year

Ocado has moved into profit in the first half of the year boosted by its lucrative partnership with Morrisons.

The online grocer reported profit before tax and exceptional items of £7.5m for the 24 weeks ending 18 May, compared with a loss of £1m last year. It also reported a 15.6% increase in sales to £442.4m.

Ocado revealed it had secured a site for another warehouse, or customer fulfilment centre, in Andover, Hampshire. Work is due to begin on the site, which will be smaller than its other two sites in Hatfield and Dordon, in the second half of the financial year.

It is also adding extra capacity at its Dordon site, which supplies both Ocado and Morrisons, in the second half.

Ocado said it had secured a three-year working capital facility of £100m to support the UK expansion.

Ocado CEO Tim Steiner said he was pleased with the company’s improved profitability.

“Although price competition increased, led by the traditional supermarket retailers, significant progress in operating efficiency and the development of our product offer meant that EBITDA was up almost 80% in the period,” said Steiner.

Ocado said it had grown the number of active customers to 396,000 from 360,000 a year ago, but that average basket size had slipped a fraction from £114.90 to £114.43.