The online grocer said it was aiming to “invest in innovation at a faster pace”, and help its clients, which include US supermarket chain Kroger and French grocer Casino.
It comes as the pandemic boom in home deliveries fades, and shoppers turn to cheaper own-branded labels.
Ocado revealed it sold 72.3 million shares in an accelerated placing, priced at 795p each. This was a 9.4% discount to Monday’s closing price.
The company also raised around £3m from retail investors and some members of its management team.
Ocado, which has seen its share price fall by almost half in the year to date, said the funds will give it enough liquidity to drive further growth.
The company also agreed a new £300m credit facility with a group of international banks, and reiterated its outlook for the financial year.
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“Despite the company still searching for sustainable profit, investors have been quick to back Ocado’s latest cash call. A share placing at 795p is a near-10% discount to last night’s closing price and 62% below the level at which the stock traded last September,” Russ Mould, investment director at AJ Bell, said.
“Ocado remains a jam tomorrow story, with the company having greased its baking trays by means of winning numerous contracts with third party grocery sellers. The next stage is to fill these trays with the right ingredients to support their online grocery operations, and that’s where all the extra money is needed alongside making improvements to its systems.
“While there remains excitement about the online grocery space, Ocado can’t keep burning through cash indefinitely. At some point soon it will have to start generating profits and making money, as that’s been the missing component with its story so far.
It comes after credit rating agency Fitch downgraded its outlook on Ocado last night. It lowered its rating to negative, from stable, and warned it would take longer than expected for the group’s international operations to turn a profit.
“Our rating reflects the growing scale, upfront investments and execution risks associated with the progress on 40 of its international [distribution centres] over the next four years,” Fitch said in a note on Monday.
It added that the pressure on profits would be temporary, but short-term profit margins would take a hit as customers are spending less per order thanks to the cost of living squeeze.
Profits are now forecast to come by November 2024, a year later than initially planned.
Clive Black, a retail analyst at Shore Capital, said Ocado needed to raise cash as it was funding “huge research and development, enormous operating costs and capital expenditure, and it doesn’t generate the money to cover this experiment”.
He said: “It’s symptomatic of an interesting business that doesn’t make enough money to cover its project.”
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