Ocado Group PLC (LSE:OCDO) results were "awful" or "better", depending on which analyst you asked, with Barclays' suggestion that "the market may be pleased" totally wrong as the shares tumbled over 10%.
Full-year underlying losses of £74mln on an EBITDA basis were worse than the £66mln loss that City analysts had forecast on average for the FTSE 100 online grocery company.
However, at the bottom line, the company made a statutory loss before tax of £0.5bn, up from £177mln the prior year.
The £4mln EBITDA loss for the retail joint venture with Marks and Spencer Group PLC (LSE:MKS) that compared to the "close to break even" guidance from the company, while the UK Logistics & Solutions £67mln profit was well short of expectations and International Solutions losses were slightly worse too.
Barclays said the results were "broadly as we had expected", with the 2023 outlook "always going to be the key issue and we think the market may be pleased to see the company’s expectations for Solutions EBITDA moving positive and capex reducing sharply".
On that, Ocado gave guidance for its slightly re-adjusted businss segments, with "stable" EBITDA for UK Logistics and "positive" for Technology Solutions, along with reiterating its guidance for "marginally positive" EBITDA for the Retail JV.
All in all this adds up to EBITDA of "very broadly" £15mln, while capital expenditure will be no more than £550mln, compared to £797mln last time.
Shore Capital analyst Clive Black said the half-a-billion loss was part of an "awful" set of results and a "truly dismal", "car crash" performance, "quite something for a business now in its twenty-third year of trading".
"One day in a distant time zone the Ocado Group may be surrounded by the words, meaningful sequential pre-tax profits, who knows, it may even pay corporation tax, but one cannot yet see the rainbow, never mind any pot of gold."
He noted that the flagship Retail JV was hit by a deterioration in trading momentum alongside elevated cost of goods, from dry ice to drivers and still faces a challenging outlook, with participation in online grocery falling from a pandemic peak of over 15% down to circa 11%.
This business is "working hard, in many cases aided by heavy promotions, to keep order flow, but it has considerable work to do if it is to fill the current spare capacity in its system," Black said, noting there may be around a £10-15m positive swing in the JV's EBITDA in 2023 with a tailwind.
Pondering if another cash call may be necessary, Black said cash flow is expected to remain negative, albeit improving, with capex set to fall but remain high.
"We do not believe that Ocado wants to cut capital expenditure, it has to in order to prevent a more distressed position. As such, Ocado Group, with depreciation & amortisation remaining high, can expect to be heavily loss-making still in FY23 with solvency ratios further deteriorating."
Over at UBS, analyst Sreedhar Mahamkali said the overall EBITDA implied from the guidance is likely be lower than the most recent City consensus forecast of £43mln.
However, "the overall picture of improving Solutions EBITDA and lower capex in the year ahead with continued confidence in winning further mandates while growing orders with existing customers is likely to be seen as positive, especially given the stock has been weak into numbers, down 9% over the last month".
UBS is 'neutral' on the shares, Barclays is 'equal weight' and Shore Cap has no rating but stated it is "cautious".