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Ocado boss to be questioned over M&S tie-up at annual results

Boss Tim Steiner will answer questions on Tuesday.

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Ocado is set to update the market on Tuesday (Katie Collins/PA)

Ocado is set to update the market on Tuesday (Katie Collins/PA)

Ocado is set to update the market on Tuesday (Katie Collins/PA)

Ocado is set to unveil its full-year results next week as speculation mounts that it is close to signing a food delivery deal with Marks & Spencer.

The online grocery firm saw its shares bounce on reports of the potential deal, and boss Tim Steiner will be asked about the tie-up when he fields questions on Tuesday.

Ocado currently has a tie-up with Waitrose, but it has been suggested that M&S would step into the breach when the existing contract ends next year.

Interesting rumours recently of secret talks between Ocado and M&S on a number of possibilities, including grocery deliveriesThe Share Centre

“Interesting rumours recently of secret talks between Ocado and M&S on a number of possibilities, including grocery deliveries and even a suggestion that M&S might buy Ocado’s entire supermarket delivery operation to leave Ocado free to focus on its technology side,”The Share Centre said.

If the deal goes ahead, it will be the latest in a long line of tie-ups the firm has announced.

Ocado has got into bed with US retailer Kroger, Swedish supermarket group ICA, France’s Groupe Casino and in Canada with Sobeys.

Retailers are keen to use its cutting-edge technology, which includes robots in warehouses.

Ocado’s shares have been on a tear since the end of December, rising more than 30% to about 990p.

Meanwhile, City analysts tip Ocado to post a fall in full-year earnings, largely linked to an accounting change.

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The group is expected to see earnings drop 10% to £75.7 million, but this falls to between £58 million to £61 million when taking into account new reporting requirements.

The figures will come after the firm increased its revenue and order numbers in the final quarter of last year.

Revenue jumped 12% to £390.7 million in the 13 weeks to December 2, in line with the company’s guidance.

New facilities in Andover and Erith helped to bolster capacity so Ocado could add more customers in the period. The Erith site is processing more than 30,000 orders per week.

Ocado handled 320,000 orders each week during the quarter, marking a 13.1% increase on the same time last year.

But average order size slipped by 1% to £104.91. Managers told analysts this was due to customers shopping more frequently with smaller basket sizes, as well as increased mobile shopping.

“Last quarterly update showed good growth in revenues and average orders per week. In this full-year results statement investors will also be looking out for any further news on the deal with US grocery store group Kroger.”


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