Ocado Group PLC (LSE:OCDO) is to provide robot fulfilment sorters at a distribution site for McKesson Canada, the country’s largest pharmaceutical distributor.
It is the UK group’s first move outside of grocery and retail with Ocado to provide AI-powered software to operate the automated product pickers.
Tim Steiner, Ocado chief executive, said it was a new and exciting milestone for the group.
“Our technology is ideally suited to supply chains that require dense storage, highly accurate inventory management and secure stock control. We are very pleased to be expanding in Canada."
Ocado will receive upfront fees during the construction process with the final payment receivable on full installation. After that it will get an annual servicing and maintenance fee.
Earnings and cash flow impact will be minimal this financial year, it added, but the deal will be cash neutral throughout the development phase and become cash and profit [EBITDA] positive in fiscal 2025 when installation is complete and income, costs and profit are recognised.
Shares in Ocado jumped 6% to 603.2p.