Online grocer Ocado has raised £575m from investors as the one-time high-flying group seeks to maintain its expansion amid a slowing UK economy.
The company is one of The biggest beneficiary of prosperity Amid online shopping during the coronavirus pandemic, the company said late on Monday it had sold 72 million shares to existing and new institutional investors for 795 pence each.
It raised an additional £3m placement through a sale of shares to management and a separate offering designed for retail investors.
Fundraising by Ocado A sell-off in tech stocks, a slowdown in UK consumers and a return to pre-pandemic shopping habits have combined to slow the group’s growth.
Ocado Retail is an online grocery business jointly owned with Marks and Spencer. last month warning Sales growth will be in the “mid-single digits” this year, down from a previous forecast of 10%.
Proceeds from the stock sale will allow it “sufficient liquidity to meet the committed demand from its existing and prospective clients into the medium term,” Ocado said in a statement.
The shares sold for about 9% below Ocado’s closing price on Monday. A favorite among investors early in the pandemic, Ocado’s stock has fallen nearly 50% over the past six months.
Credit rating agency Fitch on Monday downgraded its outlook on Ocado to negative, warning it expected the UK-listed group’s international operations to take longer to turn a profit.
In addition to its online delivery business in the UK, Ocado sells its warehouse technology and robotics to the supermarket. Ocado said the new funding will allow it to help customers including Kroger in the US and Coles in Australia grow their online grocery businesses.
The company said it “continues to capitalize on growing demand by ramping up production capacity, including entering new geographies and expanding the ability to serve customers in those geographies”.