Online grocer Ocado Group PLC said on Tuesday it recorded a widened annual loss even as revenue continued to move further above pre-pandemic levels.

Shares in Ocado were down 9.1% at 1,279.50 pence on Tuesday morning in London.

For the year ended November 28, the Hertfordshire, England-based retailer reported a widened pretax loss of £176.9 million. In financial 2020, the company reported a loss of £52.3 million.

Ocado said the loss reflected increased investment in its Solutions business, particularly the increasing roll out of the Ocado Smart Platform, a solutions suite for operating online grocery businesses.

Revenue was up 7.2%, rising to £2.50 billion from £2.33 billion in the previous year. For the 2019 financial year, revenue stood at £1.76 billion.

Within Ocado Retail, a joint venture with Marks & Spencer PLC, revenue was up 4.6% to £2.29 billion from £2.19 billion. Compared to financial 2019, retail revenue was up 42%.

Lockdown winner Ocado described its trading momentum as ‘strong’, though noted that average order size began to return towards pre-Covid levels at the end of the period as virus restrictions eased. Customer numbers saw a 22% increase to 832,000. This brought an increase in orders of 12%, to 357,000, offset by a reduction in basket size of 5.8% to £129.

Ocado highlighted that these results were constrained in the second half by the still-tight labour market in the UK, as well as reduced capacity at one of its fulfilment centres because of a fire in July.

Ocado’s earnings before interest, tax, depreciation and amortisation were down 17% to £105.9 million from £169.4 million.

Chief Executive Officer Tim Steiner said: ‘The past year has further reinforced that demand for online grocery is here to stay. In the majority of mature markets, the fastest growing channel is online and to truly win here food retailers need to deliver the best offer with the best economics across all customer missions. The innovation that is powering the development of the unique and proprietary Ocado Smart Platform is focused on providing an unequalled customer experience through ground-breaking technology which leads to an unrivalled low cost operation.

‘The new generation of Ocado technology, which we have called ’Ocado Re: Imagined’, represents a transformational leap forward allowing our partners to comprehensively out-compete peers online...With the innovations to the Ocado Smart Platform announced in January 2022, we have again re-set the bar, demonstrating decisively that an online grocery service powered by Ocado Smart Platform is able to offer what the customer wants with the economics the retailer needs’.

Looking forward, Ocado expects retail revenue to return to mid-teen growth in financial 2022 and its Ocado Smart Platform fee revenue to more than double.

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