Ocado online grocer reports half-year profit

Online grocer Ocado has posted a profit for the first half of its financial year, raising hopes that it is on track to record its first annual profit.

It reported a pre-tax profit of £7.5m for the 24 weeks to 18 May, following a loss last year of £3.8m.

Gross sales in the period were £442.4m, up 15.6% from a year earlier.

Ocado chief executive Tim Steiner said the launch of its tie-up with Morrisons had been "particularly encouraging".

Ocado formed a multi-million pound partnership with the UK's fourth largest supermarket last year, which resulted in Morrisons starting its own door-to-door delivery service in January.

The Morrisons deal should pave the way for more such agreements to commercialise the value of Ocado's intellectual property, Tim Steiner said.

Ocado has not made an annual pre-tax profit since it was founded in 2000, but analysts have been forecasting one for this year of about £16m.

Big plans

While the UK's mainstream supermarkets are seeing their sales squeezed by discount chains, the online grocery delivery market has suffered less of an impact.

Ocado's specialist online pet store, Fetch, which was rolled out last year, was doing well and sales of Ocado's own-label range were up over 50%, Mr Steiner said.

The company is planning to launch another specialist site, for kitchen and homewares in the second half of 2014, Sizzle.co.uk.

It will also begin work on a third warehouse facility, in Andover, Hampshire, if planning approval is granted. The new facility will be smaller than its existing distribution centres in Hertfordshire and North Warwickshire and will not be used for Morrisons' products.