Ocado Group PLC (LSE:OCDO) shares fell almost 16% to 149.55p after cash flow and underlying earnings worsened in the first half.
The FTSE 250 provider of supermarket warehouse automation systems reiterated its full-year guidance for positive free cash flow but revealed underlying cash outflows worsened to £147 million from £108 million a year earlier, excluding the impact of customer fulfilment centre closures.
Revenue rose 54% to £1.04 billion, although that included one-off termination payments and accelerated revenue recognition from the closure of facilities for North American clients Kroger and Sobeys. Excluding those, revenue increased only 1% to £684 million.
Underlying earnings (adjusted EBITDA) increased to £432 million from £92 million, again boosted by the closure impacts. Excluding those items, adjusted EBITDA fell 12% to £81 million.
Ocado Retail, its UK joint venture with Marks and Spencer Group PLC (LSE:MKS), continued to outperform the wider grocery market, with revenue increasing 15% and adjusted EBITDA more than doubled to £73 million.
The Technology Solutions arm won a major contract with Asda to replace the supermarket chain's ecommerce infrastructure, deploying its Smart Platform across the retailer's entire online operation from early 2027.
Overall, the group said it remained on track to deliver around £150 million of cost savings, with Technology Solutions expected to see six robot-run warehouses go live for customers over the next two to three years, including sites in Busan for South Korea's Lotte's, Tokyo for Japan's AEON this year.
Chief executive Tim Steiner said: "The first half of the year has seen accelerating international volume growth, strong commercial momentum, improved organisational efficiency, and rigorous cost discipline."
He added: "As we continue to focus on delivering growth and efficiency, we will achieve positive cash flow in the second half of the year and be full-year cash flow positive in FY27."
Broker Peel Hunt said: "In our view this is real progress: Ocado Retail is now profitable, Asda is a genuine new UK growth lever, and cost discipline is clearly biting.
"We believe the core Tech Solutions base has troughed post closures, and management's cash positive timeline looks increasingly credible."
** UPDATE: Adds share price and broker comments **
