Ocado deal close for overseas expansion

29/06/2015
The online grocer is close to a deal with an international retailer that will allow it to expand outside the UK
Ocado is closing in on a deal with an international retailer that will allow the online grocer to expand outside the UK for the first time.

Ocado revealed earlier this year that it had developed a system that allows it to sell its technology to overseas retailers. The company is due to report interim results this week, and although it is unlikely to confirm a deal, Tim Steiner, the chief executive, is expected to be confident on the prospects of striking a tie-up.
Ocado has been linked with deals with Carrefour of France and Safeway of the US in the past. Any deal would be a major boost for investors who have backed the company through some turbulent periods since it was founded in 2000.
Ocado only reported its first pre-tax profit this year after agreeing a lucrative tie-up with Morrisons to run Morrisons.com. Shares in Ocado have risen by almost 30pc since the end of March as shareholders have become increasingly confident about its outlook.

Mr Steiner said in February that the retailer had developed Ocado Smart Platform to “target international online retail business opportunities”.
He added: “We continue to receive interest from a broad group of potential international partners to discuss how we might assist them in introducing or improving online business in their own markets.”
Ocado said it had “started to engage in more detailed discussions with several parties” about using Ocado Smart Platform and that it wanted to sign its first deal in 2015.
Barclays said an agreement was vital for Ocado. James Anstead, analyst at the bank, said: “Given the importance of any such agreement, it would have to be announced as soon as possible following its resolution – so we tend to doubt that Ocado would be able to synchronise any deal signature with its results.
“Nevertheless, even without any agreement, there will be great interest in whether Ocado will repeat the February statement and whether the company sounds more or less confident than before.”
The City expects Ocado to report a rise in sales and profits in the half-year results, despite the turmoil in the grocery industry. The consensus is that Ocado will post a 15pc rise in first-half sales and a 5pc rise in earnings before interest, tax, depreciation and amortisation to £36m.
These increases would be despite the “Big Four” supermarket chains – Tesco, Asda, Sainsbury’s and Morrisons.
Last Friday, Tesco reported a 1.3pc fall in like-for-like sales, which was the best performance in the last quarter by any of the leading grocers.
However, analysts believe that Tesco is still losing money in the UK as it battles to turnaround its performance.
Rickin Thakrar, analyst at BESI, said: “We clearly see different strategies in the UK, with Asda choosing to protect profits while Tesco reaches for sales. One former retailing CEO once said that ‘anyone can give it away’ and the linear correlation between sales and profits that the market assumes is not as linear as one might believe in our view.”
Ocado declined to comment.

Fonte:http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11703609/Ocado-deal-close-for-overseas-expansion.html

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