Ocado shares jump after reporting sales growth

Shares in online grocer Ocado, which sells mostly Waitrose goods, jumped by almost 7% after it said sales were likely to be higher.

The company said second-quarter sales to 13 May were likely to be 13% up on a year ago.

That compares with growth of almost 11% in the first quarter.

Ocado, which joined the stock market in 2010, has struggled to prove it has a profitable business model.

Last year, the business made a number of downgrades to its profit forecasts.

The company, which now competes with Waitrose for online delivery of the grocer's branded goods, floated its shares at 180p.

Despite Wednesday's rise in morning trading, they are still way below that level.

They have risen 20% over the past three months after its central distribution point in Hatfield, Hertfordshire, improved its performance.

Bottlenecks at the centre have disrupted orders, raising questions as to whether its business model can compete with other supermarket delivery methods, which typically involve orders being fulfilled at nearby stores.

The company hopes to ease the supply chain by opening a second distribution centre next year.

Ocado was founded more than 10 years ago by three former Goldman Sachs bankers.