Ocado Andover warehouse fire cost over £100m

Andover, Hampshire, UK: Online delivery firm Ocado says the fire that destroyed its Andover warehouse in February cost £110m.

The cost of the fire, after insurance payments, drove it to £142.8m half-year loss on sales of £882m in the six months to 2 June .

Closure of the site – which had provided about a tenth of the company’s delivery capacity – knocked 2% off its 9.7% retail sales growth rate during the half.

Ocado has signed a deal with its client Morrisons, which allows the delivery firm to take back 30% of the space for two years at its new centre in Erith, south-east London.

Andover is being rebuilt and Ocado also plans to build a new warehouse in Purfleet, Essex.

Tim Steiner, chief executive, Ocado, said the business was also looking for other ways to use its software and robotics expertise. “In the last six months the centre of gravity at Ocado has shifted,” he said. Deals have been signed with Coles of Austrialia and Sobeys in Canada to develop deliveries.
Earlier this year, the company clinched an agreement with Marks and Spencer to give the retailer a home delivery service for the first time.

The fire in Andover – which stretched over four days – will cause £15m of disruption in the remaining six months of the financial year.
The company also said that its financial performance would be knocked by £10m of share-based bonus payouts to its management.

The warehouse in Andover is being rebuilt and construction of another facility in Purfleet, Essex is to begin shortly.


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