Ocado shares see more tasty profits, because the FTSE sweetheart makes the Australian supermarket Coles his last convert
- Ocado shares rose 6 percent in early trading on Tuesday to £ 13.32
- The food delivery company has signed a deal to deliver tech for Coles in Australia
- It is Ocado & # 39; s fifth major overseas deal in less than 18 months
Ocado shares are a delicious shade of green in early trading on Tuesday after the food trading technology company wrote its fifth major overseas deal in less than 18 months.
Ocado, currently working with Morrisons in the UK, said today that it has signed a contract for the delivery of its state-of-the-art food technology to Australian retail giant Coles.
Under the agreement, Ocado will operate two automated robot warehouses – one in Sydney and one in Melbourne, which is expected to be launched within four years.
Ocado has signed an agreement to provide Coles with its technology platform and robot warehouses
The news caused a peak of 6 percent in the company's stock to £ 13.32.
Coles is one of the largest retailers in Australia, with annual sales of £ 22 billion, 818 supermarkets and more than 1,600 smaller stores.
Coles said the collaboration – which initially cost him £ 81 million – would roughly double his capacity utilization.
The contracts come in thick and fast for Ocado, which – founded in 2000 – has transformed its fortunes in the last 18 months.
At that time, it concluded agreements with the American retailer Kroger, the Swedish supermarket group ICA, the French Groupe Casino and Sobeys in Canada.
Meanwhile, Ocado has entered into a joint venture with Marks & Spencer in Great Britain, which will spend the £ 750 million chain to purchase half of Ocado & # 39; s UK retail activities. Ocado will therefore terminate a long-term delivery contract with Waitrose.
Retailers would like to use Ocado's warehouse robots and software to help them meet the growing demand for food online.
But investors in the still loss-making company will have to be patient for a while to let in the profit.
& # 39; As with other deals of this type, it will crash tomorrow – initially cash flow negative, while Ocado set up its CFC & # 39; s setup, with revenues later & # 39 ;, said Neil Wilson of Markets.com.
The shares of Ocado have quadrupled since it registered its first international customer in 2017
Russ Mold, investment director at AJ Bell, added: & # 39; There is still very little clarity about what kind of return the company will ultimately derive from these links, which are likely to incur significant start-up costs, and how much more it can security, but some investors are enthusiastic about the potential to override the fact that the company is currently making a loss. & # 39;
Since Ocado registered its first international customer in June 2017, its shares have more than quadrupled and have taken a place in the FTSE 100.