Shares of Ocado Group cratered to a 13-year low on July 16 after the company's half-year results exposed a widening gap between management's optimism and the underlying business reality. The stock tumbled after Ocado failed to show tangible progress in talks to secure new U.S. partners , even as CEO Tim Steiner insisted deals were close.
The Headline Numbers Are Worse Than They Look
Group revenue rose 54% to £1.04 billion, but that figure was inflated by £354 million in one-off payments tied to warehouse closures by Kroger and Sobeys. Stripping those out, revenue rose just 1% to £684 million, while adjusted EBITDA — a measure of operating profit before depreciation — fell 12% to £81 million. The company's technology arm, the supposed growth engine, saw earnings drop from £73 million to £60 million as a 6% decline in the average number of live automated warehouse modules weighed on recurring revenue.
Closing Warehouses, Not Signing New Ones
Kroger in the U.S. and Sobeys in Canada recently said they would close robotic fulfillment centres, blaming weaker-than-expected demand. Ocado says it is now holding "multiple live engagements" with "significantly evolved solutions" in the U.S. market, but some potential clients are delaying decisions until 2028 or later. Without signed contracts, this pipeline is just a promise — and promises don't service £1.44 billion in gross debt.
Cash Burn Is Accelerating, Not Slowing
Underlying cash outflow, excluding closure impacts, widened to £147 million from £108 million a year ago. Liquidity stands at over £1 billion, including £700 million in cash and a £300 million undrawn credit line , but at the current burn rate that buffer has a visible shelf life. Management still targets positive cash flow in H2 and full-year FY27, but the market is skeptical.
Boardroom Turmoil Adds a Leadership Discount
Reports of unrest between chair Adam Warby and billionaire board member Jorn Rausing forced a succession plan announcement just days before earnings. Steiner will stay as CEO until the start of the 2028 financial year , a timeline that overlaps precisely with when prospective U.S. partners say they might commit. That leaves investors waiting 18 months for both a new leader and new revenue — a long time when the stock has already lost 44% in six months and the company's market value, at roughly $1.7 billion, barely exceeds its debt pile.