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Ocado: shift online ‘for good’ | Sainsbury’s | Bridgepoint IPO

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5pm: Ocado says grocery change permanent

Online shares closed lower despite grocer Ocado boss Tim Steiner claiming the pandemic has changed the groceries market ‘for good’.

The firm cut its loss before tax for the half year to the end of May by £17m to £23.6m as group revenue grew 21.4% to £1.3bn after adding thousands of customers during the Covid crisis. 

Group EBITDA more than tripled to £61m despite increased investment in the platform.

“As we head towards a post Covid-19 future, it is increasingly clear that the landscape for grocery worldwide has changed, for good,” said Mr Steiner. “Over the last eighteen months, we have shown that the Ocado model works even in the most challenging and fluid of environments.”

His comments came as the firm announced a deal to develop Alcampo’s online business in Spain. Its robotic technology is already being used by supermarket groups including Kroger in the United States, Casino in France and Aeon in Japan.

However, shoppers are cutting down how much they buy on its platform as lockdown restrictions ease. Shares in Ocado dipped 4.2%, or 83.5p, to 1901.5p.

London stocks closed in the red, as investors mulled over the latest data on the construction sector and updates from grocers Ocado and Sainsbury’s.

The FTSE 100 ended the session down 0.89% at 7,100.88.

Sterling was last trading 0.34% weaker at $1.3797, while it managed gains of 0.03% on the euro at €1.1674.


11.30am: Blueprint for recovery

More than 60 organisations from across Edinburgh have called on the Scottish Government and city council to work with them to help accelerate the capital’s economic recovery from the pandemic.

Full story here


10am: Hospitality software tie-up

Scottish hospitality software startup Stampede has acquired sector peer Springo.

Full story here


9.30am: Read Good Dental funding

Real Good Dental, with over 350,000 patients across 46 practices in Scotland, has received undisclosed funding from TriSpan, a London-based private equity firm.

Full story here


8.40am: FTSE flat

The FTSE 100 opened slightly higher, up 1.6 points at 7,166.49, as traders ignored the volatility earlier in Asia, which was driven by concerns over the Chinese technology sector.

British Airways owner IAG led the blue-chip index with a 1.5% gain.

BP and Shell were also in demand after a strong rise in US crude prices amid simmering tensions at OPEC (see below).


7am: Ocado

Online grocer Ocado’s chief executive Tim Steiner said the pandemic has resulted in a permanent shift to online grocery shopping.

His comments cam as the firm announced a deal to develop Alcampo’s online business in Spain. Its robotic technology is already being used by supermarket groups including Kroger in the United States, Casino in France and Aeon in Japan.

“As we head towards a post Covid-19 future, it is increasingly clear that the landscape for grocery worldwide has changed, for good,” said Mr Steiner. “Over the last eighteen months, we have shown that the Ocado model works even in the most challenging and fluid of environments.”

Its loss before tax for the half year reduced by £17m to £23.6m as group revenue grew 21.4% to £1.3bn.

Group EBITDA more than tripled to £61m despite increased investment in the platform.


7am: Sainsbury’s ahead

Sainsbury’s said price cutting drove sales in the first 16 weeks ahead of expectations and helped it outperform rivals in the grocery market.

Total sales rose 1.6% in the 16 weeks to 26 June from a year earlier as like-for-like sales excluding fuel also rose 1.6%. The group said it expected annual underlying pretax profit of at least £660m compared with equivalent profit of £356m last year.

Grocery sales rose 0.8% as in-home consumption stayed high during continued Covid-19 restrictions. Sainsbury’s said it performed better than competitors and gained market share after cutting prices and improving customer service.

General merchandise sales, including Argos, fell 1.4% from a year earlier but beat expectations, Sainsbury’s said. Clothing sales rose 57.6%. Sainsbury’s said it would make a further £50m of price cuts on food staples and essential items.

Sales of grocery, general merchandise and clothing were all higher than our expectations throughout the quarter,” Sainsbury’s said.


7am: Bridgepoint IPO

Bridgepoint, the UK-based private equity company, has confirmed plans to float on the London Stock Exchange that is likely to value the company at about £2 billion.

The company, whose assets include Miller Homes, aims to raise £300m.

The current owners – including 140 partners – will share a £200m windfall by diluting their stakes.


6am: Scottish business sees recovery

For the first time in over a year, businesses in Scotland can see the first shoots of recovery as COVID-19 restrictions begin to lift, according to a leading quarterly survey led by the Scottish Chambers of Commerce (SCC). 

Full story here


Global markets

Pressure on London’s blue chip stocks is expected from a rallying pound this morning, up 0.25% to $1.3887.

Wall Street returns from its Independence Day holiday.

The pull-back in London follows a downbeat mood in Asia overnight. While the Nikkei 225 index was up 0.3%, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 0.5%.

Global oil costs have hit their highest level since October 2018 after talks between major oil producing nations aimed at slowly lifting supplies ended without agreement.

Brent crude and US West Texas Intermediate (WTI) crude futures were changing hands above £77 a barrel and $76 a barrel respectively this morning – building on gains seen last week when the negotiations began.

They involved the Organisation of the Petroleum Exporting Countries (OPEC) and other major Brent producers, including Russia, who have aligned in recent years to deliver more control to production – and therefore prices – following a series of supply gluts.



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