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Ocado founder to leave this year amid rising sales Ocado co-founder to leave this year amid rising sales
(about 4 hours later)
Ocado's Jason Gissing is to quit the online grocer, leaving only chief executive Tim Steiner of the three former Goldman Sachs bankers who founded the company 14 years ago. Jason Gissing is to quit Ocado, leaving only chief executive Tim Steiner of the three former Goldman Sachs bankers who founded the online grocery firm 14 years ago.
Gissing, Ocado's commercial director, will leave at Ocado's annual meeting in May to spend more time with his four children and to work on environmental and social causes. Gissing, Ocado's commercial director, will leave at the annual meeting in May to spend more time with his four children and to work on environmental and social causes. His 2.95% stake in the company is worth about £90m.
His 2.95% stake in the company is worth about £90m. Gissing will leave Ocado on a high after strong Christmas sales and the successful launch of its distribution deal with Morrisons. Investors think the agreement to run the supermarket's online operation has transformed Ocado's prospects.
Gissing will leave with Ocado on a high after strong Christmas sales and the successful launch of its distribution deal with Morrisons. Investors think the agreement to run the supermarket's online operation has transformed Ocado's prospects. Ocado, which has never made a pretax profit, announced a 17.2% rise in gross sales for 2013 and a pretax loss of £12.5m. The firm made a £0.6m loss in 2012.
The company, which has never made a pretax profit, announced gross sales up 17.2% in 2013 and a pretax loss of £12.5m – wider than the £0.6m loss for 2012.
Gissing said that based on City analysts forecasts Ocado was on track to make its first profit in 2014.Gissing said that based on City analysts forecasts Ocado was on track to make its first profit in 2014.
"If you take them as good analysts then we should break into profit this year." He, Steiner and Jonathan Faiman founded Ocado in 2000 at the peak of the dotcom boom. Gissing, a former member of the Bullingdon Club at the University of Oxford, served as Ocado finance director for 10 years but has concentrated on employee relations, pricing, buying and corporate responsibility matters since 2010.
Gissing, Steiner and Jonathan Faiman founded Ocado in 2000 at the peak of the dotcom boom. Gissing, a former member of the Bullingdon Club at Oxford, served as finance director for 10 years but has concentrated on employee relations, pricing, buying and corporate responsibility matters since 2010.
Steiner said Gissing, who earned £330,000 in 2012, had resigned and would receive no payoff.Steiner said Gissing, who earned £330,000 in 2012, had resigned and would receive no payoff.
"Jason will be paid as normal. There is no funny money for the boys. We haven't made him resign or fired him and he is not entitled to a severance payment and nor would he want one.""Jason will be paid as normal. There is no funny money for the boys. We haven't made him resign or fired him and he is not entitled to a severance payment and nor would he want one."
After a turbulent time since the company's flotation in 2010, Ocado shares have rocketed since it signed the deal with Morrisons. Optimistic investors view the company as a potential distributor for many other retailers, including outside the UK.After a turbulent time since the company's flotation in 2010, Ocado shares have rocketed since it signed the deal with Morrisons. Optimistic investors view the company as a potential distributor for many other retailers, including outside the UK.
Ocado shares fell 3.7% to 504p in morning trading, down from the record high of 540p on 13 January.Ocado shares fell 3.7% to 504p in morning trading, down from the record high of 540p on 13 January.
Steiner and finance director Duncan Tatton-Brown said they expected more deals and were working on technology to expand internationally but that no deal was imminent. They said building up the Morrisons operation was their main job for this year and that they expected to open a third giant warehouse. Steiner and the finance director, Duncan Tatton-Brown, said they expected more deals and were working on technology to expand internationally but that no deal was imminent. The pair said building up the Morrisons operation was the main job for this year and that they expected to open a third giant warehouse in 2014.
Steiner said the UK grocery market was at an "inflexion point" with shoppers moving online rapidly, as demonstrated by Ocado's sales and the rise in supermarket internet sales over Christmas.Steiner said the UK grocery market was at an "inflexion point" with shoppers moving online rapidly, as demonstrated by Ocado's sales and the rise in supermarket internet sales over Christmas.
But he said Ocado's lead on service and accuracy was unmatchable because it had invested while the big supermarkets were slow off the mark.But he said Ocado's lead on service and accuracy was unmatchable because it had invested while the big supermarkets were slow off the mark.
"If one of them had a time machine and went back 10 years and decided to focus on this they could catch us up. They ridiculed us and have found themselves behind in a very important part of the market.""If one of them had a time machine and went back 10 years and decided to focus on this they could catch us up. They ridiculed us and have found themselves behind in a very important part of the market."
However, some analysts remain sceptical about the market's newfound enthusiasm for Ocado. But some analysts remain sceptical about the market's newfound enthusiasm for Ocado.
John Ibbotson, an analyst at the consultancy Retail Vision, said he thought Ocado would struggle to turn a profit: "Despite these results, I suspect the Ocado share price will keep on rising, fuelled by speculation that Amazon or Boots will buy it for its state-of-the-art technology, or that it can license its technology to others abroad. It's all wishful thinking and has echoes of the dotcom boom." John Ibbotson, an analyst at the consultancy Retail Vision, said he thought Ocado would struggle to turn a profit.
"Despite these results, I suspect the Ocado share price will keep on rising, fuelled by speculation that Amazon or Boots will buy it for its state-of-the-art technology, or that it can license its technology to others abroad. It's all wishful thinking and has echoes of the dotcom boom," he said.