Ocado has seen profits plummet, reporting an overall loss for the full year despite seeing sales rise as it continued to ramp up investment in its technology arm.
For the year to December 3, the online-only grocer saw sales rise 12.4 per cent, but it endured a major drop in pre-tax profits, reporting a loss of £500,000 compared to a £12 million profit in the prior year.
Retail earnings over the period also rose 4.5 per cent to £79.2 million, while order numbers rose 14.3 per cent to a 263,000-order average per week.
The heavy loss was reportedly due to significant investment in its technology arm, which Ocado warned would be further ramped up in the coming financial year and could represent more strain on earnings.
“Now is the time to take advantage of our growth opportunities,” chief executive Tim Steiner said.
“We will invest to ramp up our new solution in both Erith and Andover and to have the right resources in place to meet growing demand for the Ocado Solutions offer.
“We believe that taking advantage of these international opportunities now will make our virtuous cycle turn faster in the years ahead.”
This further rise in technology investment will see Ocado throw £210 million into UK logistics hubs, distribution platforms and CFCs in Andover and Erith, while issuing an extra five per cent of its share capital in order to raise funds.
Though 2018 underlying earnings are likely to suffer, earnings in 2019 are expected to “improve significantly” as the investment starts to pay off.
Ocado is also ramping up its international expansion efforts, having signed a deal with Canadian retailer Sobeys last month.
This comes just months after it struck a deal with Groupe Casino, the French supermarket giant.