Ocado Gains as Sales Growth Accelerates, Warehouse Hits Record
Ocado Group Plc (OCDO), the U.K.’s largest online grocer, rose the most in almost a month in London trading after saying second-quarter sales growth accelerated and its automated warehouse is operating at record levels of capacity.
The shares climbed as much as 7.3 percent, the steepest intraday gain since April 27. They were ahead 1.5 percent to 103.3 pence at 8:43 a.m. Ocado has almost doubled in value this year.
Sales growth increased 13 percent in the 12 weeks ended May 13, the Hatfield, England-based retailer said today. Revenue had gained 11 percent in the first quarter. Construction of a second warehouse in Dordon is on track with testing to start over the summer, the statement shows. Ocado was forced to hire temporary staff last year and introduced some manual picking of products as it sought to improve capacity at its automated warehouse.
“Positively, the next major development in Hatfield, a piece of highly automated picking machinery, has started to go live,” said Andy Wade, an analyst at Numis Securities with a buy recommendation. The addition of the second warehouse is “game-changing,” he added. “We remain confident in the Ocado business model.”
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