Business

Ocado lures investors for £575m as UK economy slows

Online grocer Ocado has raised £575m from investors as the once high-flying group seeks to sustain its expansion amid a slowing UK economy.

Company, is one of the the biggest beneficiaries of the boom in online shopping during the coronavirus pandemic, said late on Monday that it had sold 72 million shares to existing and new institutional investors for 795p per share.

It raised an additional £3 million through a share sale to management and in a separate offering designed for retail investors.

Fundraising by Ocado stemming from a combination of a sell-off in tech stocks, a slowdown in UK consumption and a reversal from pre-pandemic shopping habits combined to slow the group’s growth.

Ocado Retail, an online grocery joint venture that it jointly owns with Marks and Spencer, warning last month sales growth this year will be in the “mid-single-digit” range, down from a previous forecast of 10%.

In a statement, Ocado said that the proceeds from the share sale will give it “enough liquidity to fund the requirements of the company’s current and projected customer engagements as of this year.” midterm”.

Shares were sold at a discount of about 9% from Ocado’s closing price on Monday. A favorite among investors during the early stages of the pandemic, Ocado’s stock has fallen nearly 50% in the past six months.

Fitch, the credit rating agency, downgraded its outlook rating on Ocado on Monday, warning that it expected the UK-listed group’s international operations to take longer. to make a profit.

As well as an online delivery business in the UK, Ocado sell warehouse technology and its robotic technology to supermarkets. Ocado says the new funds will allow it to help customers, including Kroger in the US and Coles in Australia, grow their online grocery businesses.

The company said it “continues to make the most of growing demand by increasing capacity, by reaching new geographies, and expanding its offering to customers in these regions.” .

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