Ocado’s latest trading update has seen its earnings jump by one fifth despite price increases and a reduction in promotions, and is planning to raise £200 million to invest in further growth.
The online grocer said underlying earnings rose to £37.6 million in the 22 weeks to April 30, a 20.5 per cent increase on the £31.2 million recorded a similar period last year.
However, that similar period last year only covered 20 weeks, meaning the figures were flattered.
In addition, Ocado’s orders-per-week growth rose 16.2 per cent to 258,000 for the period, but customers spent an average of £108.81 per shop — a 1.6 per cent drop from £110.60 the previous year.
Despite this, pre-tax profit shot up by 45.7 per cent to £6.7 million, which Ocado attributed to a “reduced number of promotions” and “limited” price increases for some products.
In addition, revenue increased 24.7 per cent to £600.4 million, partly due to its delivery deal with Big 4 grocer Morrisons.
The trading update came alongside an announcement by Ocado to raise at least £200 million through an offering of senior secured notes.
It also plans to secure about £150 million through the amendment and extension of its revolving credit facility.
“The proceeds of the offering will support the continued growth of our UK retail capacity, and further improvements to our proprietary platform,” Ocado said.
Earlier this month, the online grocer confirmed it had struck an overseas deal for its software platform with a mystery “regional European retailer”.
Tthe new agreement means Ocado can help its unnamed partner create an online grocery business, although it will not use Ocado’s automated warehouse technology.