UK online supermarket Ocado said today that investment in its partnership deals would hit short-term profits, while remaining tight-lipped about media reports of tie-up talks with Marks & Spencer.
The company also reported a 21% fall in full-year earnings, hit in part by new accounting rules.
Though Ocado has a 1% share of Britain's grocery market, its £6.9 billion stock market valuation has been driven by the technology side of its business.
The company provides third parties with the infrastructure and software to develop their own online grocery businesses.
Its shares have nearly doubled over the last year on the back of four major overseas partnership deals - the biggest of which was signed last May with US supermarket chain Kroger.
Last week media reports said Ocado was in talks over a possible tie-up with Marks & Spencer, Britain's best-known retailer.
M&S currently sells wine, flowers and clothes online, but does not offer a full food delivery service.
"It is our business to talk to retailers and we never comment on who we're talking to," Ocado's chief executive Tim Steiner told reporters. M&S has also declined to comment.
The reports have centred on Ocado replacing its current main food supplier, Waitrose, with M&S.
Ocado's deal with Waitrose, owned by the John Lewis Partnership, ends in September 2020, though it could be extended.
"We have a good relationship with Waitrose," said Steiner.
"In September 2020 we're still be in business, we're still be selling 50,000 plus lines to our customers, including high quality own-label products - they may be Waitrose, they may not be Waitrose, we'll have to wait and see," he said.
Steiner said the retail side of Ocado's business remained critical to attracting technology partners.
"It's not a non-core asset that we're looking to dispose of," he said.
Ocado reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £59.5m in the year ended December 2, down from £75m in 2016-17.
Group revenue rose 12.3% to £1.6 billion for the year.
For 2018-19, Ocado forecast retail revenue growth of 10-15% as it increases capacity and grows market share. It also forecast growth in retail core earnings.
But it said that while the targeting of further partnership deals would generate additional cash fees for the technology solutions division there would be a short term hit to profits.
The adoption of a new accounting standard will mean technology solutions revenue will only be recognised once a customer's first automated warehouse - which Ocado calls a customer fulfilment centre (CFC) - is opened.
However, build costs will still have to be recognised.
Total capital expenditure for the group in 2018-19 is expected to be £350m.