Ocado Reports Earnings Rise for 2012, But Makes The Third Pre-Tax Loss In A Row

Why 2013 Is Make Or Break For Ocado

Online grocer Ocado will be hoping for a strong 2013 after revealing it failed to make a profit in 2012, despite increasing its sales from £598.3 million in 2011 to £678.6m last year.

For the third year in a row, Ocado made a pre-tax loss across the whole year, although the loss of £0.6m was better than 2011's £2.4m loss figure.

Ocado has also seen its debt balloon over the 12 month period, rising from £19.2m in 2011 to £55.2m last year.

Chief executive Tim Steiner remained positive, saying the consumer push for online grocery shopping would "improve the attractiveness of Ocado".

Ocado is due to open its second fulfilment centre, creating more than 1,000 jobs in the Midlands.

Last month saw Sir Stuart Rose, the former boss at Marks & Spencer, announced as the new chairman. Due to join in March and take over Sir Michael Grade's role in May, Rose has a tough road ahead.

Ocado has been struggling since it went public in July 2010 - its initial public offering was met with derision after the share price, set at 180p, was deemed to be over priced.

More recently, Ocado has seen some benefits from being an online retailer over the Christmas period, with sales up by 14% in the six weeks to 6 January.

"Ocado is still driving slowly down the dusty road towards eventual profit. The signs are positive with app-based sales and private label business helping generate a healthy sales rise and an even better operating profit gain in a tough food retailing market," Nick Hood, business analyst at Company Watch told the Huffington Post UK.

"But speculation persists about its business model and its long term independence. If anything, this has intensified since the arrival of the former boss of one of the UK's most iconic retailers. Ultimately, business is about creating an acceptable return for stakeholders and Ocado has around £175m of capital deployed. Success on this measure looks a very, very long way away still."

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