Ocado to make $300m in acquisitions as digital grocer bumps forecasts
Digital grocer Ocado has announced two acquisitions worth nearly $300m (£232m) and bumped up its full year earnings forecast, it announced this morning.
The retail darling said that it had continued to see strong sales growth during the third quarter as people stuck to digital shopping amid to the coronavirus pandemic.
Shares in Ocado rose nine per cent this morning as the news of a new lockdown from Thursday hit the markets.
The grocer was one of the few winners of the first lockdown, as more and more people switched to buying food online.
The firm has been boosted by a new partnership with Marks & Spencer which began earlier this autumn.
In the 12 weeks to 4 October, Ocado increased sales by 41.9 per cent as the ecommerce retailer was buoyed by its new deal with M&S that launched at the beginning of September.
As a result, the group is expecting earning of £60m for the year, up from prior expectations of £40m.
The company will report its full year results on 9 February.
In addition, the company announced the purchases of two US-based robot companies.
It has made a $262m offer for Kindred Systems, as well as a $25m bid for Haddington Dynamics.
Ocado chief executive Tim Steiner said: “We consider the opportunities for robotic manipulation solutions to be significant, both for Ocado Smart Platform clients and across the fast-growing online retail and logistics sectors.
“Given the market opportunity we want to accelerate the development of our systems, including improving their speed, accuracy, product range and economics.”
Analysts at Peel Hunt welcomed the update, saying that the firm had more “clarity” now.
“Ocado has also enhanced its robotic picking, aimed at saving costs at very attractive returns, with material M&A. The solutions fit seamlessly into its current footprint and will be fully-integrated.
“There is still a lot more to come from this innovative disruptor”, they added.