Ocado Group PLC (LSE:OCDO) will provide a trading update on Tuesday for its Ocado Retail joint venture, having stated earlier this month that it is preparing to relinquish rights to partner Marks and Spencer Group PLC (LSE:MKS).
Final results for 2024 from the grocery delivery group saw the JV recognised as a 'discontinuing operation'.
Ocado Group, which sold a 50% stake to M&S in 2019, said it intended to "deconsolidate" Ocado Retail from the accounts this year as it plans to pass control to M&S within in 12 months.
The 50-50 joint venture has been controlled by Ocado via 'tie-breaking' rights that expire in August 2024, but Ocado said there will be no change in economic ownership or financial consideration exchanged between the partners - not yet at least.
Ocado Retail sales were up 13.9% over 2024, with 17.5% sales growth in the fourth quarter and the fastest growing grocer in the UK as it has been for 11 consecutive months.
Orders grew 12.5% on Ocado.com and the 1m active customers milestone was passed this time last year, with 500,000 orders per week achieved in Q4.
For 2025, guidance was for Ocado Retail to grow revenue "above 10%", while expanding underlying EBITDA margins to around 4% from 2.9% last year.
Following the results, some analysts said Ocado Group was reaching the point where more radical action might be required, including potentially selling all or some of its 50% stake in the JV.
UBS praised the Ocado Retail business, noting that the average Ocado.com basket value increased 1.0%, driven by basket size growth of 0.2% and an increase in average selling price of 0.4%.
"Continued focus on improving availability, delivery slots, and price investments as it now matches c10k LFL products with Tesco are all helping Ocado Retail growth to outperform the market, in our view."