Ocado Share Discussion Threads

[stutes] 15/11/2023 16:09

The up uptick in price contradicts Exane Paribas and Barclays price for Ocado.

[bridggar] 15/11/2023 16:02

Slooooowly waking up...

[qantas] 15/11/2023 15:59

RNS Number : 5971T
Ocado Group PLC
15 November 2023



15 November 2023

Ocado Group plc (the "Company" or "Ocado")

Announcement of deal for Ocado to provide fulfilment technology to
McKesson Canada

Ocado Group ("Ocado") has today announced a deal for Ocado Intelligent Automation ("OIA") to provide automated fulfilment technology at a distribution site for McKesson Canada. The deal will see Ocado sell its proven, unique warehouse fulfilment technology in a sector outside of grocery retail, and provide the AI-powered software applications necessary to operate that technology long term. McKesson Canada is a leading diversified healthcare provider in Canada and is the largest pharmaceutical distributor in the country.

Tim Steiner, CEO of Ocado Group said:

"Today represents a new and exciting milestone as we bring the amazing benefits of Ocado's technology to the healthcare distribution and logistics sector. Our technology is ideally suited to supply chains that require dense storage, highly accurate inventory management and secure stock control. lt has been proven over 20 years in one of the most complex supply chain environments, online grocery, and we're now bringing our experience and IP to more sectors. We are very pleased to be expanding in Canada."

Expected Financial Impact

Ocado will receive upfront fees during the construction process with the final payment upon final installation. Ocado will also receive an ongoing annual fee related to the servicing and maintenance of the technology.

The impact of this transaction will be minimal on cash flow and earnings in the current financial year. This is a capital light deal which will be cash neutral throughout the development phase and will be cash and EBITDA positive in FY25 when installation is complete and we recognise the income, costs and profit.

Please do your own research as always

[bridggar] 15/11/2023 15:50

Not sure the market really understands just what that RNS means in terms of potential. Incredible opportunity to seize here

[ny boy] 15/11/2023 15:47

Looking good after that news just come in,stay long for the Santa 🎅 rally👌

[topazfrenzy] 15/11/2023 14:49

Looks like the bargain of the year to me

[topazfrenzy] 15/11/2023 14:48

MORNINGSTAR VIEW:

Fair value and profit drivers

We trim our fair value estimate for Ocado to GBX 1,550 from GBX 1,600 per share after updating our forecasts to account for a more cautious outlook in fiscal 2023 and 2024 (Ocado Retail) and groupwide cost headwinds (energy, dry ice). Our valuation reflects our thesis that Ocado Smart Platform will become one of the most sought-after providers of online grocery fulfilment solutions for large brick-and-mortar grocers as online penetration increases in developed markets. Our discounted cash flow model assumes an 8.9% weighted average cost of capital.

In our base-case scenario, we expect online penetration to rise to 25% by 2040 from around 4% in 2019 across a group of developed economies (with more than $20,000 GDP per capita and a population of 4 million) with OSP capturing around 10% of the respective digital grocery markets through Ocado’s partners/grocers. This translates into 252 CFCs ("standard-size" CFCs with a capacity of GBP 350 million gross sales per year, or 65,000 orders per week) for Ocado’s partners over the next 20 years. In addition, we expect Ocado to penetrate the online convenience grocery market through its Ocado Zoom service (we assume 15% online penetration in the top-up market, with OSP garnering a 15% share), which we believe can run as efficiently as the main shop service.

We expect Ocado will be able to achieve a roughly 40% return on invested capital for each CFC it builds and operates at full capacity, which translates into a net present value of GBX 11.60 per share or GBP 84 million. As a result of the solutions business’ high profitability and returns on invested capital as well as the segment being a more significant part of consolidated group revenue and profits, we see improving group EBITDA and operating margins by the end of our explicit forecast horizon reaching around 16% and 10% in fiscal 2031, respectively, versus 2.4% and negative 5.3% in fiscal 2021 respectively.

Strong profitability and top-line growth along with moderate capital outlays that are partly shouldered by Ocado’s partners (GBP 50 million for Ocado versus GBP 20 million for partner per standard CFC) should drive significant improvements in ROICs in the long term.

[ny boy] 14/11/2023 15:40

Depends on whether or not The FED etc can engineer a soft landing, way to go yet imo

[leadersoffice] 14/11/2023 14:45

Interest rate cuts will come earlier than expected. Make the most of this Santa rally. After Christmas .., markets could end up selling off. The news will be priced in. But could luck to all those who took advantage of the falling share price since August and topped up. Give yourself a good Pat on the back. Good luck

[leadersoffice] 14/11/2023 14:42

Those of you that shorted .... Burn burn and burn

[dlewis1] 14/11/2023 14:41

Pleasantly surprised here.

[ny boy] 14/11/2023 13:47

Big move higher after low US inflation data, so more FED hikes but still no cuts for a long while but good for a Santa rally to 1000p+ imo 👍🏼🥳

[dlewis1] 13/11/2023 15:54

It's been making some strong reversals today which is a good indicator.

[arja] 13/11/2023 14:25

it might be OK if Nasdaq indices keep rising I guess and US bond yields fall in coming weeks .

[dlewis1] 13/11/2023 14:06

I'll like to be wrong but I think it's heading down

[arja] 13/11/2023 12:51

maybe but chart now is saying it could go either way , ie back to 450 or up to 600 in coming weeks . it is certainl;y often a good trading stock.

[ny boy] 11/11/2023 18:51

Back to 600p next week imo,strong breakout of indicies like S&P500, bodes well, finally for the start of a Santa rally later this month

[stutes] 10/11/2023 10:11

NatWest strips £7.6 million from payout to ex-boss after Nigel Farage row

hxxps://f7td5.app.goo.gl/eopgu5

Sent via @updayUK

The Ocado Board should adopt Natwest and cut executive rewards to reflect fall in share price, cfc rollout and orders for robots. Fall in share price should mean fewer shares are awarded at the lower price.

[arja] 10/11/2023 09:50

markets do not work like that Diewis1 as depends on volumes and big players do not show their hand fully or even appear on L2 ticket :) . US indices falling has hit UK market today and most stocks down

[dlewis1] 10/11/2023 08:53

What's going on here showing more buys than sells yet the price drops

[stutes] 10/11/2023 08:29

Where are the big robotic orders?

[stutes] 09/11/2023 14:51

S4Capital is focusing on paying down debt and paying a dividend. Ocado should do the same.

[arja] 09/11/2023 09:41

interesting and I just googled it . MKS owns 50% of Ocado retail with OCDO owning the other half .