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02 Nov 2020 | 07:01

Ocado ups guidance by half as shoppers go online

(Sharecast News) - Ocado increased its guidance for annual earnings by 50% as consumers switched to internet shopping during the Covid-19 crisis.

The online grocer and technology company said trading at its retail arm had remained strong during the fourth quarter of its financial year. The retail operation is owned jointly with Marks & Spencer.

Ocado said it expected group earnings before interest, tax, depreciation and amortisation to be more than £60m in the year to the end of November. It had previously predicted earnings of more than £40m.

"Sales are in line with the trends reported in the third quarter although growth rates reflect the seasonality of the quarter," Ocado said. The FTSE 100 company will publish a fourth-quarter update on 10 December.

Ocado also said it agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m (£203m) and robotic arm designer Haddington Dynamics for $25m.

M&S bought 50% of Ocado's retail division in 2019 and replaced Waitrose as the product supplier in September 2020. M&S is due to report interim results on 4 November. The business has boomed during the Covid-19 emergency as shoppers have moved online at record rates.

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