Keep the faith! Ocado boss in rallying cry to investors after 90% share drop

Ocado’s chief executive has urged disgruntled shareholders to maintain confidence in the company as sales rise and losses narrow.

Investors should have confidence in the online supermarket and technology company, despite its shares falling nearly 90 percent in less than four years, according to Tim Steiner.

“I’m not worried about investors losing confidence, because they shouldn’t,” he said. “We have a clear plan and we’re executing on that clear plan.”

Setbacks in the rollout of robotic warehouses with overseas partners and concerns about the progress of the joint venture with Marks & Spencer have raised alarm bells.

Even longtime self-promoting analysts at Bernstein, who describe themselves as “one of the last remaining bulls,” turned on the company this week, declaring, “The jam-tomorrow story is now about less jam and more tomorrow.”

They downgraded their rating on Monday and sent Ocado shares Down 10 percent from its worst day in two years.

The ongoing sell-off since its 2020 peak during the Covid boom has led to speculation that the company could become a takeover target or move its listing to New York.

But yesterday, struggling investors were given some good news after sales rose 12.6 per cent to £1.5bn in the six months to June 2.

Losses for the half year narrowed to £154 million from £289.5 million last time.

This sent shares up 20 per cent in early trading, but some of the gains were given back and the day ended up 5.9 per cent, or 20.1p, at 360.5p.

John Moore, senior investment manager at RBC Brewin Dolphin, said “Ocado is at a crossroads” over whether its recovery plan will succeed.

There is still a lot of ground to cover to get to where many analysts were hoping. It will take some self-help to meaningfully reverse the share price decline of the past three years.’

Steiner told investors there would be no direct move to the New York Stock Exchange, but he did not rule it out.

He said: ‘I think the London market can be difficult for some companies. Would you consider other markets in the future, as a global technology company?

That could be. At the moment we are a UK listed plc and I have no immediate plans to change that.’

There was little news of a dispute over payments between Ocado and M&S, but Steiner said they “continue to engage constructively”.

Ocado says M&S owes it a final instalment of £190.7m as part of the £750m 50-50 partnership agreed in 2019.

But M&S ​​bosses say they do not have to pay up because the company has failed to meet its targets.