Ocado CEO: 'I don't want to get bought'

Tim Steiner OcadoOcadoOcado CEO Tim Steiner

Online grocery retailer Ocado has no intention of bowing out to Amazon.

Tim Steiner, the chief executive of Ocado, said the business has “seen absolutely no impact so far” from Amazon Fresh on its market share.

When asked whether Amazon launching its own service would quash acquisition rumours, Steiner said: “We’ve got a fantastic proposition here and they have launched a small business. I don’t want to get bought. I want to build an independent British business globally,” on a conference call with reporters.

Ocado shares jumped on Tuesday after it reported a boost in half-year pre-tax profits to £8.5 million, from £7.2 million during the same period a year earlier.

Revenue is up £584.2 million, up 15% year-on-year.

Here’s what that did for shares:

Earlier this month, Ocado shares tumbled to a three-year low in reaction to the launch of Amazon Fresh, a service some analysts have warned could cause erode Ocado’s market share. The shares had fallen by more than a third since the start of April and are at their lowest point since 2013.

In a note circulated to clients on Tuesday, Goldman Sachs said Ocado’s business had potential to grow despite the competition in the marketplace:

“While market conditions have limited EBITDA growth in the period, the continued strong growth in order volumes supports the long-term outlook for the business and underlines the attractiveness of Ocado to customers despite intense competition. Trading at close to 1x EV/sales and down c.30% YTD, we think the stock has strong valuation support here.”

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