UK: Sales acceleration for Ocado
"I don't think the competitive environment in UK grocery has ever been as tough as it is," Chief Financial Officer, Andrew Bracey said this morning. "It's the toughest grocery market on the planet, and we don't expect that to change, but we're happy operating in it."
Shares in the online grocer rose 2.8% in early trading after the group said gross sales increased 10.9% to £162.1m in the 12 weeks to 19 February. That was in line with company guidance of first-quarter sales growth of around 10% and a slight improvement on growth of 10.8% in the fourth quarter. "We're seeing both people spending more on line and also us getting a larger share of the online market," said Bracey.
Ocado said average orders per week increased by 13.4% to 116,987 in the first quarter, though average order size fell 2.2% to £115.49. It said 93.2% of orders were delivered on time or early, up 0.9 percentage points year-on-year, while 98.2% of items were delivered as ordered, up 0.2 percentage points.
Ocado's 2011 earnings were hit by higher staffing costs as it battled to overcome capacity constraints at its main distribution depot in Hatfield, north of London. With Hatfield now operating at record levels of capacity, service initiatives kicking in and further improvements at the depot due to come onstream in the second quarter, Ocado said it expects sales growth to accelerate as the year progresses.
Analysts are on average forecasting a rise in 2012 gross sales of 16% and earnings before interest and tax of £7-8m.
Source: www.kamcity.com
