4. Financial Analysis 4.1 Income The revenue of the company primarily comes from grocery retailing and monetization of intelleсtuаl property through providing operating and technology services (Ocado Group, 2014). The chart below depicts Ocado’s growth in revenue between 2012 and 2016, showing that the company underwent a growth in total revenue of 87%. There was a constant growth of the revenue over the period. The growth in revenue also results from a steadily increasing user base of the retail company (Robinson, 2017). Ocado saw an increase in active customers from 355,000 in 2012 to 580,000 in 2016, which is 63% more. 4.2 Stock Price Ocado hasn’t made much of a progress in terms of stock prices in the last few years. In January 2013 Ocado opened a new Customer Fulfilment Center (CFC) in Dordon, which improved the business’s operating efficiency and capacity (Ocado Group, 2013). On the 17th May 2013 Ocado signed an agreement with Morrisons for providing ecommerce services regarding Morrisons online retail website (Ocado Group, 2013). Shortly after that in June Ocado launched a new specialist pet-care store for called Fetch (Ocado Group, 2013). All these successful projects drove the value of the company up and hence the stock price went through a big shift. …show more content…
It reported a loss of £12.5 million at the end of the year. Furthermore, one of the co-founders of the company, Jason Gissings, declared that he wants to leave the company and sell his shares (BBC News, 2014). Hence, shares suffered a big price drop in 2014. Following that, Ocado released a profit of £7 million, which was a good progress after reporting a loss the previous year. Tim Steiner, Ocado’s CEO, gave credit for the profit to the company’s increased use of highly-mechanised distribution centers, thus increasing efficiency (Butler and Monaghan,