There are two faculties of thought on Ocado. It’s both a technological innovator whose distinctive licensing proposition is disrupting a $2tn+ international market, or it’s a grocery supply firm that subsidises its prospects.

Whichever manner, Ocado burns money. Heaps and much and much and much and masses of cash:

Full-year outcomes on Tuesday from Ocado had been ugly even by its requirements. A £501mn pre-tax loss was the most important in its 23 years of buying and selling. The group’s 50-50 three way partnership with Marks and Spencer turned lossmaking on an Ebitda stage. Annual income from Worldwide Options, the licensing bit, barely lined the division’s underlying loss. Steerage for this yr was to count on one thing not a lot better, which has raised the prospect of one other money name to comply with Ocado’s fundraisings in 2010, 2012, 2020 and 2022.

In accordance with our calculations, Ocado has misplaced a complete of £1.5bn since its formation in 2000. Each £1 of income generated over its lifetime has value roughly £1.08:

Or to place it one other manner, the common basket worth of £118 Ocado reported for 2022 had an all-in value of just about £141 (along with an as-yet undefined loss worn by retail joint-venture associate M&S). Overlook for a second all of the worldwide ambitions and the corporate has successfully been paying roughly £23 per order for its prospects to not go to the retailers.

Tim Steiner, Ocado’s co-founder and CEO, mentioned: “Our robust steadiness sheet provides us the means to finance our progress by way of the midterm (4-6 years) by which period we count on Ocado Group to be money movement optimistic with the money flows from present CFCs ample to finance future investments.”

And positive, why not. What’s one other six years within the scheme of issues?

Additional studying:
— Goldman Sachs begins protection of Ocado with “purchase” ranking (PDF, 2010)
— This time it’s totally different (FTAV, 2010)