Ocado (OCDDY) shares led European market gainers Tuesday after the U.K. online grocery delivery service beat full-year sales forecasts and said it is in talks with multiple overseas partners.
Ocado said revenue increased 14.8% to £1.267 billion ($1.59 billion) for the 52 weeks to Nov. 27, with gross sales rising 13.6% to £1.271 billion compared with the same time period last year. The company reported pretax profit was up 21.8% in the year to £14.5 million, better than the £11.3 million expected by analysts.
Ocado shares traded more than 8% higher in the opening hour of trading in London, leading the Stoxx Europe 600 Index and changing hands at 264 pence each, trimming the three-month decline to 4%. The FTSE 350 Food and Drug Retailers Index was marginally up at 3,082.23. It has gained 18.2% in since August 2016.
Ocado, which has been facing intense pressure from Amazon's (AMZN) - Get Amazon.com, Inc. Report burgeoning food delivery service in the United Kingdom, said it is in continued discussions, which began in February of last year, with multiple international retailers to begin running operations for them in the U.K.
The group, which once held first-mover advantage in the home delivery of groceries in the U.K., has suffered a number of setbacks over the past year as Amazon, which entered the British market through a tie-up with Morrisons (MRWSY) , the U.K.'s No. 4 grocery store by market share, applied pressure with two-hour delivery in certain areas.
This led Morrisons to review its contract with Ocado in August, when the supermarket said the deal was too costly and restrictive.
Ocado CEO Tim Steiner said the results "reflect robust trading in our core business and show continued progress against our strategic objectives in what has been a challenging retail environment."
"Over the course of the last year, we grew our active customer base by almost 14%, with growth in average orders per week approaching 17%, testament to the strength of our customer proposition, market position and technology," Steiner said in a statement.