// M&S is expected to confirm that its joint food delivery venture with Ocado is meeting performance targets, triggering a payment of £190m
// The Ocado Retail joint venture raked in £28million profit for the group in the six months to October 2
Marks & Spencer is expected to confirm next month that its joint delivery venture with Ocado is meeting performance targets, triggering a payment of almost £200million to the online grocer.
The agreement was struck three years ago and launched in September 2020.
The next financial hurdle must be met by November 2023 although bosses at both businesses are confident that the goals will be met.
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This means that M&S will be obliged to pay approximately £190m to Ocado under the terms of the joint-venture agreement.
The payment will not need to be made until the performance deadline has passed at the end of next year. At around that time, M&S will take control of the board of the joint venture.
There have also been speculation M&S may also try to raise its existing stake in Ocado Retail above 50%.
Sources have suggested that the possible move would be a signal that M&S is ready to accelerate its turnaround strategy under its newly appointed co-chief executive Stuart Machin.
However, company sources have dismissed the idea that increasing the stake is a consideration and M&S declined to comment.
But the joint venture has helped to lift the prospects of the high street stalwart, as the service benefited as lockdown shoppers turned to delivery firms while staying home.
The operation raked in £28million profit for the group in the six months to October 2 as shoppers continued to buy online.
Last month, Machin, M&S’ current food managing director and chief operating officer, alongside joint-chief operating officer Katie Bickerstaffe would become co-chief executives, replacing current chief Steve Rowe in July.
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