Ocado Shares Jump 11% on “Strong” Half-Year Results

Ocado just gave the markets something to talk about. On July 16, 2025, the company released its half-year financial results. And the market reacted fast, Ocado’s stock surged by more than 11%. That’s a major jump in just one day.

So, what’s going on?

The online grocery and tech company showed stronger performance across key areas. Revenue grew. Losses narrowed. And both its UK retail arm and international tech business improved. For investors, that was enough to boost confidence.

We’ll analyze what’s behind the numbers. We’ll look at how Ocado’s business is changing, how it’s earning more, and what this all means for its global operations.

Let’s get into the details.

 Financial Highlights: First‑Half 2025 Results

• Revenue rose 13.2% to £674 million compared to H1 2024.
• Adjusted EBITDA jumped 76–77% to around £92 million.
• The company recorded a statutory pretax profit of £612 million, swinging from a £153 million loss last year.
• Adjusted pre‑tax loss narrowed to £137 million, ahead of the consensus of £141 million.
• A £300 million debt refinancing, plus a £112 million letter of credit, strengthened liquidity.

Ocado Retail: Performance Breakdown

• The M&S joint venture, Ocado Retail, saw revenue grow 16.3% to £1.5 billion.
• Orders opened weekly climbed to roughly 491,000, up 14.7%.
• Despite a drop in items per basket, rising prices and order frequency boosted average basket value by 0.7%, to £124.19.
• The operating loss narrowed from £25.7 million to £17.1 million.

Ocado Technology and Solutions Division

• Technology Solutions revenue reached £277 million, topping expectations of £263 million.
• Segment EBITDA was £73 million, beating forecasts of £53 million.
• Revenue in this unit grew 14.9% year-over-year.
• Ocado is targeting around 10% annual growth in its Technology division, with expected EBITDA margins between 20% and 25%.
• International deals include new CFCs in Spain (Bon Preu), South Korea, Saudi Arabia, and ongoing work with Kroger and Coles.

Operational Restructuring and Efficiency Gains

• Underlying cash flow improved by £93 million year-over-year.
• Annualized cost savings near £40 million, as R&D and overheads were reduced.
• CapEx spending has reduced. Combined with refinancing, this helped boost group liquidity to £1.17 billion, including £866 million cash, plus a £300 million facility.
• Ocado aims to turn cash flow positive in FY 2025/26 and full-year positive in 2026/27.

Market Performance: Share Price and Trading Reaction

• Shares rose more than 11%, climbing from near-decade lows.
• Trading volume surged as investors reacted to the strong results.
• On July 17, FTSE 100/250 also rose, helped by the Bank of England’s easing outlook.
• Ocado shares had fallen ≈35% over the past year; this rebound signals renewed investor focus.

Strategic Priorities and Business Direction

• Priority 1: Positive cash flow by FY 2025/26, with full-year positive by FY 2026/27.
• Continued expansion of Customer Fulfillment Centres (CFCs): eight new across the next three years.
• End of exclusivity terms opens Tech Solutions to more retail partners.
• Ocado is trimming R&D jobs (~500 roles) and shifting toward AI-driven productivity.

Challenges and Risks Ahead

• Tech rollout delays in Kroger (US) and Sobeys (Canada) still weigh on investor sentiment.
• Slower expansion may lead to overcapacity in logistics and affect margins.
• Analyst caution: RBC and others say the cash-flow goal may be ambitious under current growth.
• Concerns persist over UK economic strength, inflation, and BoE policy.

Conclusion

We see a clear step forward. Revenue and earnings rose sharply. Retail and Tech both added growth. The company took aggressive financial steps. That drove an 11%+ share jump. Ocado now heads into the second half focused on cash flow and expansion plans.

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This content is for informational purposes only and not financial advice. Always conduct your research.