Ocado - comment

We understand the market focus on the M&S JV given the International Logistics business is some years away from being cash generative. However, investing in the International division is why Ocado has over £900m of cash on its balance sheet. Cash flow to Ocado out of the JV is minimal and distorts the accounting picture. The sooner M&S exercises its control option and the asset is deconsolidated the better. Last month Ocado brought Lotte (South Korea) on board and Kroger’s announced the acquisition of Albertsons, both are more pertinent to the long-term equity valuation (the first new logistics client since covid and acquisition by Ocado’s US partner respectively). A cleaner corporate structure will help move on from the whipsawing price movements.