Ocado unveils first annual profit in its 15 years

Online grocer reports 20% jump in sales in face of growing competition

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The Independent Online

Online grocer Ocado has made an annual profit for the first time since it was founded nearly 15 years ago, figures from the company reveal today.

Ocado, which delivers goods for both Waitrose and Morrisons, produced a bottom-line surplus of £7.2 million after sales jumped by nearly 20 per cent to £948.9 million in the year to November 30.

Chief executive Tim Steiner said the company continued to grow ahead of the online grocery market and significantly ahead of the wider market, which has been the subject of intensifying competition in recent months.

The company's number of active customers stood at 453,000 at the end of the financial year, with their average spend coming in at £112.25.

Ocado is some 18 months into a £170 million 25-year delivery partnership with Morrisons but its long-running deal with Waitrose allows the upmarket grocer to pull out in September if it wishes.

Shore Capital retail analyst Clive Black said: "After a decade and a half of trying, Ocado has worked out how to deliver baked beans, ice cream, Jaffa cakes and chipotle chillies without booking a bottom-line loss. We welcome the passing over of this financial threshold."

However, Mr Black has retained his sell rating on the stock and said high investment costs and its meagre profit performance were expected to persist.

The company's shares were 2 per cent lower following the full-year results.

Ocado, which employs about 8,500 people, recently announced plans to open a fourth distribution centre in south-east London by 2017, in addition to current sites at Warwickshire and Hertfordshire and a third site planned for Hampshire later this year.

In the seven days before Christmas its two warehouses processed nearly 40 per cent more goods for Ocado.com and Morrisons.com than the year before.