British online supermarket Ocado Retail said today it would return to positive earnings for the 2022/23 year after revenue growth accelerated in its fourth quarter as it won more customers.
The business is a 50:50 joint venture between Ocado Group and Marks & Spencer. Shares in Ocado Group jumped 6% in early trading.
The joint venture did, however, caution that revenue growth in its new 2023/24 year was likely to be impacted by lower growth in average selling prices as it invests in sharper prices and as food price inflation continues to subside.
It forecast overall revenue growth in 2023/24 in the "mid-high single digits".
Online's share of Britain's total grocery market was about 7% before the onset of Covid-19 in 2020. It peaked at about 15% during the pandemic, but has since fallen back to 11.6%, according to Kantar data, as shoppers returned to stores.
Ocado Retail said its revenue rose 10.9% to £609.4m in the 13 weeks to November 26 - a fourth consecutive period of quarter-on-quarter growth.
The joint venture benefited from a 5.9% rise in active customers to 998,000, a 4.8% increase in volumes, or number of items sold, and a 3.8% rise in average basket value.
"Our trading performance, and our focus on costs, has translated through to our bottom line, returning to positive EBITDA for the full year," the joint venture said. It made a loss of £4m in its 2021-22 year.
Ocado Retail also said it hit its highest ever level of sales over the peak Christmas trading period. Overall sales increased 7% between December 20 and December 24.
It said the 2023/24 year would see it "continuing on our journey towards a high mid-single digit EBITDA margin in the midterm."
M&S, which also sells clothing and homewares, was a big Christmas winner. Last week it reported a better-than-expected 8.1% rise in UK underlying sales for its third quarter to December 30. However, that data did not include Ocado Retail sales.
