This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/2016/sep/13/ocado-shares-fall-on-reports-of-squeezed-profit-margins
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Ocado shares fall on reports of squeezed profit margins | Ocado shares fall on reports of squeezed profit margins |
| (35 minutes later) | |
| Shares in Ocado have plunged after the online grocer reported that profit margins were under sustained pressure amid fierce competition between food retailers. | Shares in Ocado have plunged after the online grocer reported that profit margins were under sustained pressure amid fierce competition between food retailers. |
| Sales – excluding its partnership with supermarket chain Morrisons – rose 13.6% to £314m in the 12 weeks to 7 August, Ocado said in a trading statement. Average weekly orders rose 18.9% to 226,000 but the average order size dropped 3.4% to £107.94. | |
| Tim Steiner, Ocado’s chief executive, said: “As the market remains very competitive, we are seeing sustained and continuing margin pressure and there is nothing to suggest that this will change in the short term.” | Tim Steiner, Ocado’s chief executive, said: “As the market remains very competitive, we are seeing sustained and continuing margin pressure and there is nothing to suggest that this will change in the short term.” |
| Steiner said the increase in orders was Ocado’s best volume increase in more than five years. But shares fell more than 12% in early Tuesday trading due to concern about pressure on margins and the consequences for profits. Duncan Tatton-Brown, Ocado’s finance director, said it would not be a surprise if analysts cut their annual profit forecasts. | Steiner said the increase in orders was Ocado’s best volume increase in more than five years. But shares fell more than 12% in early Tuesday trading due to concern about pressure on margins and the consequences for profits. Duncan Tatton-Brown, Ocado’s finance director, said it would not be a surprise if analysts cut their annual profit forecasts. |
| Food retailers are locked in a price war fuelled by the success of the German discounters Aldi and Lidl as consumers look to get more value from their squeezed incomes. | Food retailers are locked in a price war fuelled by the success of the German discounters Aldi and Lidl as consumers look to get more value from their squeezed incomes. |
| Ocado did not give an update on its long-running attempt to sign up an overseas retailer to use its delivery systems. It had expected to announce a deal by the end of last year but Steiner said negotiations had been more difficult than he expected. | Ocado did not give an update on its long-running attempt to sign up an overseas retailer to use its delivery systems. It had expected to announce a deal by the end of last year but Steiner said negotiations had been more difficult than he expected. |
| Ocado’s share price has been volatile since the company floated in 2010. After dropping below the 180p offer price for almost two years, they revived after a deal was signed to distribute Morrisons’ online orders. | Ocado’s share price has been volatile since the company floated in 2010. After dropping below the 180p offer price for almost two years, they revived after a deal was signed to distribute Morrisons’ online orders. |
| The agreement appeared to offer the prospect of further deals with overseas retailers without the technology for large-scale online orders but no such contract has materialised. | The agreement appeared to offer the prospect of further deals with overseas retailers without the technology for large-scale online orders but no such contract has materialised. |
| Ocado shares fell as much as 12.8% to 281p on Tuesday morning and were the biggest losers in the FTSE 350 index of large and mid-sized companies. | Ocado shares fell as much as 12.8% to 281p on Tuesday morning and were the biggest losers in the FTSE 350 index of large and mid-sized companies. |