Ocado shares jump as retail deconsolidation drives £607 mln first-half profit

Published 18/07/2025, 09:56
© Reuters.

Investing.com -- Ocado Group (LON:OCDO) shares rose over 8% on Friday after the company posted a £607 million profit for the first half of 2025, reversing a £144 million loss a year earlier, on Thursday. 

The swing was largely due to a £783 million non-cash gain from the deconsolidation of its Ocado Retail joint venture, which was reclassified as an associate from April 7.

Group revenue rose 13% year-on-year to £674 million, with Technology Solutions contributing £277 million, up 15%, and Logistics delivering £397 million, up 12%. 

Adjusted EBITDA increased by £40 million to £92 million, while the underlying cash outflow narrowed to £108 million from £201 million in the same period last year.

In Technology Solutions, recurring revenue rose 10% to £223 million, and non-recurring revenue more than doubled to £37 million, including £17 million in exit fees from Morrisons. 

Segment EBITDA rose to £73 million from £35 million, with the margin improving to 26% from 14%. 

Support and technology costs declined £4 million overall, aided by a company-wide cost control initiative.

Ocado Logistics reported adjusted EBITDA of £19 million, up from £17 million, with orders per week rising 11% to 614,000 and eaches up 10% to 718 million. 

Units processed per labor hour improved 8% to 239, while deliveries per van per week rose to 207.

Ocado Retail, now accounted for under the equity method, grew revenue 16% to £1.53 billion. Adjusted EBITDA rose to £33 million from £21 million, and the underlying EBITDA margin increased to 3.3% from 2.8%. 

Weekly orders rose 14.7% to 491,000, and active customer numbers were up 13.4% to 1.16 million. Average basket value increased slightly to £124, with a 1.4% rise in average item price.

Group adjusted loss before tax improved to £137 million from £153 million. Adjusting items totaled £744 million, primarily due to the retail deconsolidation. 

End-June liquidity stood at £1.17 billion, comprising £866 million in cash and £300 million in undrawn credit facilities. 

Capital expenditure declined by £40 million to £171 million, due to lower spend on Technology Solutions and Customer Fulfilment Centres.

Ocado maintained full-year 2025 guidance, including an expected £200 million underlying cash outflow and £300 million in capital expenditure. It maintained its target to become cash flow positive in fiscal year 2026.

Ocado also reported progress on international operations, with additional modules and fulfilment capacity added in Australia, Spain, and South Korea. The number of live modules rose to 122 from 112.

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