Ocado has reported lower full year losses of £600,000 as it prepares to open a second fulfilment centre in the coming weeks.

The online grocer’s loss for the year to 2 December narrowed from £2.4m last year. However, it is still waiting to make its first profit since floating on the stock market in 2010.

Ocado’s sales rose 11.4% over the year to £731.9m, helped by a 40% increase in its range, which now comprises 28,000 products. The bigger range includes 8,000 non-food products, which it would like to increase to 15,000 by the end of 2013.

Ocado said the opening of its new fulfilment centre in Dordon, Warwickshire, would give it significant additional capacity and room to grow. The first customer orders will run through the new warehouse at the end of February.

“The introduction of a significant increase in fulfilment capacity this year to meet growing demand, and our continued efforts to drive efficiency, will enable us to demonstrate the longer term benefits of our business model,” said Ocado CFO Duncan Tatton-Brown.

Shares in Ocado rose 7% to 111.4p on Thursday morning.