Ocado shares plunge as it says Olympic impact uncertain

Online grocer Ocado's shares closed 19.8% lower after it said the Olympics may hit sales and reported flat half-year profits.

Ocado, which makes half its sales within the M25, said the potential impact of the Olympics made it hard to forecast third quarter sales.

It said it had seen some disruption from the Jubilee celebrations.

Pre-tax profits for the 24 weeks to 13 May were £0.2m, unchanged from a year ago, but revenues rose 11.4% to £308m.

"There is uncertainty as to the effect of the forthcoming Olympic games," said chief executive Tim Steiner.

Analyst Andrew Wade from Numis blamed the "cautious" outlook statement for the share price fall.

"Really it's a bump in the road, it shouldn't change the long term story," he added.

Despite the potential impact of the Olympics, Ocado said that it expected sales growth to increase in the second half of the year.

Ocado said its customer base had grown to 337,000, although average order size in the first half of the year had dipped slightly to £113.10.

Ocado shares, which have had a turbulent ride since floating at 180p in July 2010, closed down 19.8% at 86.75p after the results were released.

The shares hit a low of 52p in December but have risen 82% in the past six months.