Ocado’s shares leapt by 427% in 2013 to 447p
The market value of the listed grocers would have fallen in 2013, were it not for the stratospheric rise of Ocado.
As the FTSE 100 enjoyed its best year since 2009, climbing 14%, the market value of the listed grocers – Tesco, Sainsbury’s, Morrisons and Ocado – climbed just 3.8% in 2013. Without Ocado their value fell 1.2%.
Small increases in the value of Sainsbury’s and Morrisons were outweighed by a 4% drop in Tesco’s share price, equivalent to £1.1bn.
Meanwhile, on the back of its lucrative deal to help Morrisons launch online, Ocado shares leapt 427% in 2013 to 447p, transforming its market cap from £620m to £2.65bn. Ocado continued its good run this week, climbing 11.7% on Wednesday to a record high of 513.5p, while the share price of Morrisons fell to a seven-year low of 234p on Thursday – its lowest level since August 2006 – following a disastrous Christmas trading period in which like-for-like sales fell 5.6%.
The rise means Ocado’s market cap is up to £2.9bn, over half that of Morrisons, which fell this week to £5.4bn. Ocado has never made a full-year profit while Morrisons made £879m pre-tax profits in 2012/13. And Ocado’s £716m sales in 2012 were just 3.8% of the bricks and mortar retailer’s £18bn sales in the same period.
Exane analyst Andrew Gwynn said Ocado was benefiting from “anti-supermarket” trade. “The traditional UK grocers are really out of favour after a very difficult Christmas and concern that margin investment is around the corner, so if have to own something in food retail Ocado has been the answer,” he said.
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