Ocado Confident for Technology Licensing Deal After Missing Goalby
Shares rise as much as 8.2% as comments reassure investors
Ocado hasn't signed deal since Morrison partnership in 2013
Ocado Group Plc said it remains confident of licensing its distribution-center technology, reassuring investors after the U.K. online grocer missed a self-imposed goal to find a partner by the end of last year.
The company expects to “sign multiple deals in multiple territories in the medium term,” Ocado said in a statement Tuesday, sending its shares up as much as 8.2 percent.
The comments gave fresh impetus to speculation that the company will come good on its promise to sign a lucrative deal with an international grocer. Since partnering with Wm Morrison Supermarkets in 2013, Ocado has failed to reach any further agreements, missing the target to do so by the end of last year.
“In many ways, Ocado’s technology is its greatest asset,” said John Ibbotson, an analyst at consultant Retail Vision. “But despite the company reportedly courting international suitors like Carrefour and Safeway, it has been unable to sell its systems overseas.”
Reporting a 31 percent increase in full-year operating profit, Ocado said its technology proposition “is proving to be of great interest to a significant number of retailers.”
Such an agreement would provide a grocer with all of the computer technology and warehouse equipment they need to run an online service of any size.
Ocado shares were up 1.9 percent at 268.4 pence at 8:53 a.m. in London. The stock has fallen 12 percent this year, weighed down by Amazon.com Inc.’s introduction of a grocery service for U.K. members of its Prime service. On a conference call, Ocado Chief Executive Officer Tim Steiner said the retailer hasn’t held talks with Amazon about a possible bid.