Ocado Profits Slump

6th February 2018.

Shares in online grocer Ocado took a knock after it reported a profit warning, an annual loss, and a plan to tap investors for more cash.

It seems that high street shops aren’t the only ones taking a hit this month. Online food retailer, Ocado, has waved the red flag amid profit warnings and falling capital. The retailer has admitted that its transition to a technology company has led it to spend heavily to gather funding. While Ocado is the newest addition to a very long list of struggling retailers, the fact that the online grocer is risking its profits for technological innovation highlights the future of big business.

Here at the Credit Protection Association, we encourage our members to prepare for every eventuality. Whether this is a collapse, a profit warning, or a new innovative scheme.

It has been reported that Ocado made a £0.5 million pre-tax loss in 2017, compared with a £12 million profit the previous year.

The largest chunk, 27 percent, of Ocado’s capital expenditure was spent on its push into technology. The company invested £42.8 million on technology last year, up from £34.3 million the previous year. The company is developing proprietary software and has also increased its technology staff to 1,100.

Ocado’s turnover rose 12.7 percent on the previous year at £1.43 billion in 2017, driven largely by its retail business, which contributed £1.32 billion to that figure, representing a 12.4 percent rise.

Shares in Ocado fell 6.09 percent at 462.5p in early trading.

The way you manage your business is under great scrutiny at present. Whether you’re a large company, or a small startup, all businesses are equally privy to disaster. Simply credit checking customers and suppliers can help avoid the danger, and can protect your cash flow. Don’t let Ocado discourage you from expanding your business, as there are ways to pursue growth without damaging your profits in the process.

Here at the Credit Protection Association, we encourage all our members to monitor their own financial standing, as well as to keep an eye on on customers and suppliers. CPA offers various credit management products, from thorough credit reports to company directories and tracing services. If you want to free up your finances to pursue expansion, or if you want to be pulled out from underneath someone else’s, then please get in touch with the details below!

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow. Alternatively, either email us or use our contact form.