Ocado Group reports 14.1% revenue growth, eyes cash flow positivity by FY26

British retail technology company Ocado Group has reported a robust financial performance for the full year of 2024, with revenue rising 14.1% to £3.2 billion, driven by expansion in its Technology Solutions growth and Ocado Retail performance segments. The company saw a notable increase in adjusted EBITDA, reaching £153.3 million, reflecting operational improvements and higher efficiency across fulfilment and logistics operations. Although Ocado Group reported a statutory loss of £374.3 million, the reduction in cash outflows and strategic debt refinancing have positioned it for future growth.

The company’s Technology Solutions division experienced an 18.1% revenue increase, supported by new customer fulfilment centre (CFC) launches and ongoing automation technology rollouts. Meanwhile, Ocado Retail expanded its market share as the fastest-growing online grocer in the UK, posting a 13.9% rise in revenue, bolstered by increased active customers and higher order volumes. The logistics division also recorded steady growth, with revenue rising 7.6% to £718.0 million, driven by enhanced warehouse efficiency and rising fulfilment demand.

What Factors Contributed to Ocado Group’s Revenue Growth in FY24?

Ocado Group’s revenue expansion was primarily driven by Technology Solutions growth, which saw a significant 18.1% rise in revenue, reaching £496.5 million. The year saw three new CFCs go live in Sydney, Melbourne, and Madrid, accelerating the adoption of Ocado’s automation and logistics technology. The continued increase in live modules across Ocado’s global partner network also contributed to higher recurring revenues from its proprietary Ocado Smart Platform (OSP).

The retail segment played a key role in Ocado Retail performance, achieving a 13.9% revenue increase to £2.69 billion. The number of active customers grew by 12.1% to 1.12 million, with weekly orders exceeding 500,000 for the first time. Basket values saw modest growth of 1%, reflecting the company’s ability to sustain demand in a competitive grocery market.

The logistics segment, which operates delivery and fulfilment for both Ocado Retail and Morrisons, generated £718.0 million in revenue, up 7.6% from the previous year. The efficiency gains from Ocado’s automation rollout, combined with streamlined warehouse operations, contributed to the division’s continued profitability.

How Is Ocado Group Enhancing Operational Efficiency with Automation?

Ocado Group has been leveraging automation to drive cost reductions and improve warehouse efficiency, with its On-Grid Robotic Pick (OGRP) and Automated Frameload (AFL) technologies playing a pivotal role. The adoption of these systems at the Luton CFC resulted in over 30% of volumes being picked robotically, setting a benchmark for future automation rollouts. These advancements are expected to lower labour costs by more than 100 basis points, improving overall profitability in the fulfilment process.

The retail technology company is also shifting its technology investment strategy, reducing R&D spending and focusing on enhancing existing automation systems. In FY25, total technology spending is expected to decline to £250 million from £289 million in FY24, reflecting a more cost-efficient phase of investment. The integration of AI-driven logistics solutions further supports Ocado’s vision of enhanced supply chain automation, which remains a critical driver for its global partnerships.

What Are Ocado Group’s Expansion Plans for the Coming Years?

Ocado Group has outlined aggressive expansion plans for its Technology Solutions growth, targeting a 10% revenue increase in FY25 and the deployment of at least seven new CFCs over the next three years. Key locations include Warsaw, Charlotte, Phoenix, Hachioji, and Busan, which will contribute to the company’s aim of reaching 150 live modules by FY27.

The retail segment is set to maintain double-digit growth, with an emphasis on increasing order volumes and expanding customer reach. The logistics division will continue its push toward higher fulfilment efficiency, ensuring stable profitability while meeting growing demand.

How Will the Deconsolidation of Ocado Retail Impact the Company’s Financials?

From April 2025, Ocado Group will deconsolidate Ocado Retail from its financial statements, treating it as a joint venture with Marks & Spencer (M&S). While the financial reporting structure will change, Ocado Group’s economic interest in Ocado Retail remains intact. The move is expected to enhance transparency and financial clarity, allowing the company to focus on expanding its core automation and logistics businesses.

Despite this structural shift, Ocado Retail continues to lead the UK online grocery market in growth, with expectations of over 10% revenue growth in FY25. The company’s strategic focus remains on scaling its fulfilment capacity and optimizing network efficiency.

What Is Ocado Group’s Financial Outlook for FY25?

Ocado Group is aiming to turn cash flow positive by FY26, supported by strategic cost reductions, revenue expansion, and operational scalability. The company expects an underlying cash outflow of approximately £200 million in FY25, an improvement over the £223.7 million outflow in FY24. Liquidity remains strong at £1.07 billion, with cash reserves of £771.5 million, ensuring financial flexibility to support growth initiatives.

Debt management remains a priority, with Ocado having successfully refinanced £700 million in debt, extending its maturity profile and alleviating short-term financial pressures. The company remains committed to balancing capital efficiency with long-term investment in automation and logistics solutions.

How Are Investors Reacting to Ocado Group’s Performance?

Ocado Group’s stock performance reflects mixed investor sentiment, as market participants assess the company’s strong revenue trajectory against its ongoing losses. The expectation of cash flow positivity by FY26 remains a key driver for investor confidence, while concerns persist around capital expenditure and profitability timelines.

The expanding adoption of Ocado’s automation technology by global partners has positioned the company as a leader in grocery logistics innovation. Analysts view Ocado’s ability to scale its automation solutions and enhance cost efficiencies as crucial factors in maintaining competitive market positioning.

Can Ocado Group Sustain Its Growth Momentum?

Ocado Group’s FY24 results demonstrate strong financial progress, with Technology Solutions growth and Ocado Retail performance driving revenue expansion. The company’s strategic focus on automation, efficiency, and international expansion places it in a strong position for sustained growth.

As Ocado advances toward cash flow positivity, its ability to scale automation, optimize costs, and strengthen global partnerships will be critical in maintaining investor confidence and market leadership. The continued evolution of its robotics and AI-driven logistics technology will play a fundamental role in shaping the future of grocery automation and e-commerce logistics.