Ocado Group PLC (LSE:OCDO) publishing its interim results this coming Thursday, following an eventful few weeks.
A month ago it raised £578mln of new cash and said this amount will satisfy its needs for the “medium term”, based on management's belief that, based purely on its existing contractual agreements, it can deliver annual underlying profit (EBITDA) above £750mln and be cash positive within the next five or six years.
“Hmm,” said analysts, who have seen several cash calls from the company over the years.
Barclays pithily said that its opinion “is that Ocado’s track record of forecasting is less than perfect, so we question whether the market will be prepared to accept these forecasts without applying a significant discount”.
Credit Suisse was fairly confident about the profit growth predictions but downgraded its rating based on the lack of new clients and fears that the economics of its robot-operated warehouses, or customer fulfilment centres (CFCs) as the company calls them, are not as valuable as had been predicted.
Not long after that, Ocado unveiled a new style of partnership for its international Solutions arm, with its deal with French retailer Casino extended to create a new concept of robot-operated online delivery warehouses that can be accessed by “all grocery retailers in France”.
Shares in the online grocery group are down around 60% since the start of the year, but are roughly flat since May.
With no profit expected until at least 2025, investors will be looking for other sources of encouragement, including sales growth from its UK retail joint venture with M&S, the roll-out of new micro-sites and progress with international partners, where it plans to add nine robot-operated customer fulfilment centres this year.