Online supermarket Ocado is to raise more than £1 billion

Online supermarket Ocado is to raise more than £1 billion of fresh equity and debt as it seeks to capitalise on a surge of interest during the coronavirus crisis. The group said the pandemic had been a “catalyst” for a permanent and significant move towards online grocery deliveries. It said the new money would provide “the financial flexibility to capitalise on opportunities arising from the significant acceleration in online adoption and grow faster over the medium term”. Although the company still sells groceries direct to consumers in the UK, its main focus — and the main driver of its share price — is the commercialisation of its intellectual property through licensing deals with other food retailers. Ocado’s shares have risen 40 per cent so far this year — vastly outstripping those of established food retailers — and the company’s market capitalisation is now higher than that of Sainsbury, Morrison and Marks and Spencer combined… Ocado has already signed a flurry of licensing deals with Kroger in the US, Sobeys in Canada, ICA in Sweden, Groupe Casino in France, Coles in Australia and, most recently, Aeon in Japan… The capital raising would leave Ocado with cash and equivalents of around £2.2 billion.

Jonathan Eley