Russell Pointon, Director & Head of Consumer for Edison Group, comments:
“Following the surge of online food shopping on the back of lockdown restrictions, Ocado has been swift to act and has managed to raise £1 billion from investors to expand their robotic warehouses.
“From a market’s perspective, although Ocado has seen a 6% fall this morning following the placing announcement, in general numbers, the retailers ‘shares are up 52% this year and is one the FTSE 100´s top performers. With this backdrop, management clearly saw this as an opportunity to capitalise on their strong share run to raise further cash.
“Although the placing may come as a surprise, particularly considering the excess cash Ocado has following the £750m selling of half their UK retail business to M&S this year and their £600m bond issue in December, the company would have surely been scared to miss out on investor appetite for online stocks.
“Considering the company recently announced that it will not make pre-tax profit at least until 2021 as they expand their centres around the world and their c. £15bn market valuation, it will be interesting to see investor´s and shareholder reaction over the next few weeks.”