Ocado - comment

The FYE 25 headline results were broadly in line with our expectations (Revenue £688m vs £669m forecast), with both Technology and UK ahead. Adjusted EBITDA was in line at £86m, the lower margin being driven by costs in the Technology business. Operational Cash flow was ahead of our original forecast, the difference being the £68m Autostore settlement and the £113m received from Kroger. The guidance for 2026 reflects the loss of revenue from the closure of 12 modules by Kroger and Sobeys CFC (three CFC by Kroger and one by Sobeys). Ocado expects to add 10 modules in FYE26, which will leave the company at approximately £ 119, compared to our original forecast of around £ 140. The £261m payment from Kroger and the £18m from Sobeys were received after the financial year endand are not included in the £740m of cash on hand. We see the value of the income streams as covering most of the debt, and with the value of the 50% holding in the M&S JV, the bonds are fully covered. The webcast is at 0930. 

https://sparklive.lseg.com/OcadoGroupHatfield/events/8eed78dd-a702-4872-b95c-afc09584e335