Ocado issues IPO prospectus
OCADO will this morning unveil the prospectus for its ambitious initial public offering, which it hopes will value the firm at more than £1bn.
The online grocery delivery firm will begin a two week roadshow tomorrow as it seeks to convince investors it is worth the monster sum despite never turning a profit.
Ocado, which recently signed a 10-year contract to deliver Waitrose food, said it is hoping to raise £200m.
It expects existing shareholders to cash in on shares worth roughly the same, with the John Lewis Pension Fund (JLPF) expected to sell almost all of its 30 per cent stake.
Ocado’s managers are also hoping to cash in on the flotation, with big players, including chief executive Tim Steiner, director and founder Jason Gissing and chief financial officer Andrew Bracey, set to share £30m if they can double the firm’s share-price after its flotation.
This will add to a paper windfall of £180m to be split between the founders – Steiner, Gissing and Jonathan Faiman – on completion of the float.
In the six months to May, Ocado cut its operating loss by 63 per cent to record a loss of £2.7m. Ebitda doubled to £8m and gross sales rose 30 per cent to £246m.
Sources close to Ocado denied reports that an HSBC analyst predicted it would remain in the red until 2014, attributing it to a “misinterpretation”. Other analysts expect the firm to turn a modest profit next year.
The money raised in the float will be invested in a new state of the art delivery depot to enable the firm to keep up with customer demand. The firm says no decisions have been made on the location but hinted it could be located in the north.
Ocado will be hoping the roadshow drums up enough support from investors to avoid a similar humiliation to New Look, which was forced to pull its £1.2bn IPO earlier this year after failing to meet its minimum price range.
Ocado declined to comment.