Ocado Retail has announced a 14% increase in revenue for the fiscal year 2024 (FY24), with figures reaching £2.68bn ($3.37bn), up from £2.35bn in the previous year.
The growth is attributed to a rise in customers and order frequency, which has bolstered the company’s share of the UK online grocery market by 1.8 percentage points to 12.9%.
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The company’s EBITDA [earnings before interest, taxation, depreciation and amortisation] surged by £34m, reflecting a robust trading performance with momentum accelerating throughout FY24. Excluding £33m of fees related to the Hatfield customer fulfilment centre (CFC) Ocado Retail’s underlying EBITDA margin stood at 2.9%.
The company saw its gross profit percentage climb by £117m, outstripping revenue growth due to improved promotions, an optimised product mix and waste reduction efforts. This occurred despite significant investments made into customer value propositions.
Fulfilment and delivery costs rose by 10%, remaining below the 12.5% increase in orders, thanks to enhanced productivity at CFCs which helped mitigate higher delivery expenses.
Support costs have also risen due to cost inflation and the annualisation of senior role recruitment initiated in FY23.
Ocado Retail experienced a £21m hike in fees, driven by index-linked official selling price fees and the annualisation effect following the opening of the Luton CFC in the second half of FY23.
Ocado Retail, a joint venture company by Ocado Group and M&S, reported a growth in orders (12.5%) and a 12.1% increase in active customers over the last 12 weeks of the fourth quarter.
Ocado Retail anticipates a year of measured growth in FY25 and is on track to become cash flow positive during FY26.
The company projects above 10% growth in revenue and a 4% underlying EBITDA margin for FY25.
Ocado Group CEO Tim Steiner stated: “Ocado Retail in the UK continues to lead the way as consistently the fastest growing grocer in the market and reaching 1 million active shoppers for the first time. We have learned valuable lessons from our early global deployments.
“Over the past year, we’ve significantly increased the number of Ocado experts embedded across our global partners, helping them to hone logistics operations and build new online strategies alongside the Ocado smart platform.
“These teams, combined with exciting new enhancements we are set to deliver in 2025, will drive faster growth, more efficient operations and an even better quality of experience online for shoppers across 11 of the world’s biggest grocery markets.”
