Ocado's Andover fire quadruples annual losses

£111.8 million write-off from the value of the destroyed warehouse offset by £74 million insurance payout

Online supermarket and technology firm Ocado has reported a tripling of annual losses as a result of the fire that devastated its Andover warehouse this time, last year.

Presenting its financial results for 2019, the company revealed that it was forced to write-off the £111.8 million value of its destroyed warehouse, but had benefited from a £74 million insurance payout.

As a result, the company has posted a post-tax loss of £211.8 million, against losses of £44.9 million in 2018.

While retail revenues rose by 9.6 per cent compared to 2018, UK solutions revenues ballooned, increasing from £123 million to £583.2 million as a result of the deal it struck with Marks & Spencer, shifting the company's UK retail partner for Ocado.com from Waitrose. Overall revenues weighed in at £1.76 billion, up by 9.8 per cent on 2018.

International Solutions Revenues, meanwhile, remained flat at just £500,000, although they are set to accelerate as deals with France's Groupe Casino, Japan's Aeon, Australia's Coles, Canada's Sobeys, and US supermarket giant Kroger all come on stream.

However, CEO Tim Steiner - who has enjoyed a £54 million bonus despite the losses - chose to emphasise the company's recovery from the fire, which took out a significant chunk of its delivery capacity, and the first of its overseas deals kicking off.

"The first half of this year will see a new milestone for Ocado Group; the opening of the first customer fulfilment centres for our international partners," said Steiner.

"These state-of-the-art robotic facilities are a core part of an end-to-end solution embracing automated fulfilment, an intuitive and easy to use webshop, and hyper-efficient last-mile delivery, which will enable Sobeys and Groupe Casino to deliver the same outstanding customer experience to consumers in Canada and France as Ocado Retail does today here in the UK."

Selling the Ocado Smart Platform and automated fulfilment centres is a central objective of the company. Ocado has adopted the Google Cloud to deliver and manage the software side of its technology, while also developing some of the most advanced robotic technology in the world. As a result of that investment since it was founded, analysts at investment bank Peel Hunt rate Ocado's warehouse automation and technology more highly than Amazon's.