Ocado has reported a £200,000 pre-tax profit for the six months to 15 May, the online grocer’s first move into the black in its 10-year history.
Sales reached £297 million, a 21 per cent increase on a year ago, when it posted a £6.7m loss.
Tim Steiner, Ocado’s chief executive and co-founder, also revealed a plan to increase the number of product lines it offers from 21,500 to 30,000-40,000.
Amid concerns about Ocado’s capacity constraints and increasing competition in the online grocery sector, the company, which floated at 180p last July, saw shares slip to 170p, their lowest price this year.
Ocado has been delivering fewer orders on time or early (92.7 per cent) but Steiner said it was still “miles ahead of our competition”.
Mintel’s director of retail research, Richard Perks, told FPJ he is “impressed” by the business’ ascent into profit but expects its new £17m distribution centre in Birch Coppice Business Park, Warwickshire, to tip it back into the red.
He said: “It has been a huge learning curve for them as no one else was doing it when they entered the market.
“It’s a strong brand because of its Waitrose connection but I think it’s too early for Ocado to go it alone,” he added.
Until last year, Waitrose had been prevented from delivering food to homes within the M25 as part of its supply agreement with Ocado.
But a new 10-year deal agreed in May 2010 will open up the market to the retailer from this summer.
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