Ocado Talks to Retailers on Licensing Its Web Sales Capability
Ocado Group Plc (OCDO) is talking to a number of retailers about licensing its Web shopping technology after shares surged on confirmation it’s negotiating to help WM Morrison Supermarkets Plc start an online business.
“This is in line with what we have been saying to our investors that we will monetize the intellectual property and the know-how in the business,” Duncan Tatton-Brown, chief financial officer of Ocado, the U.K.’s largest Internet-only grocer, said in an interview today. “We are always talking to people,” he said, without identifying the retailers.
Ocado shares rose as much as 29 percent, the biggest intraday jump since Nov. 19, to 177.10 pence, close to the 180 pence price of the 2010 initial public offering. The stock was up 17 percent at 161.40 pence as of 11:09 a.m. in London.
Ocado, which on Feb. 7 reported a narrower full-year loss, will turn cash positive in the second half of the year, once “we finished paying for the second fulfillment center” Tatton- Brown said. Faster growth, the appointment of former Marks & Spencer Group Plc boss Stuart Rose as chairman and an extension of Ocado’s debt facility in November have eased fears over the company’s future following concerns about the time it will take to make a profit.
Ocado opened a second warehouse at Dordon in central England in February, which currently handles 10,000 to 15,000 orders a week. At its peak, Ocado’s first facility handled 150,000 a week, Tatton-Brown said.
Gross sales rose 14 percent from a year earlier to 185.5 million pounds in the 12 weeks to Feb. 24., Ocado said today.
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