Ocado announced that its partner Sobeys will close a customer fulfilment centre (CFC) in Alberta that operates using Ocado’s technology to fill customers’ orders. This comes as the rate of e-commerce expansion in the region has been slower than originally expected.
The closure is set to reduce Ocado’s fee revenue in the current year by around £7mn. However, Ocado expects to receive compensation of £18mn for the closure of this site.
Sobeys will continue to operate two other CFCs in Greater Toronto and Montreal, where e-commerce penetration is improving.
Ocado still expects to turn free cash flow positive in the current financial year.
The shares fell 9.5% in early trading.
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All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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