Ocado has secured a major new deal to build a large robotic warehouse for an unnamed European retail chain, providing a much-needed boost to the UK-based technology company.
Shares of the retail technology company rose as much as 10 percent on Tuesday following the announcement.
This timely deal comes after Ocado shares plummeted to a 13-year low last week, following a disappointing half-year financial update.
The company told investors it has sealed a deal to build a large customer service center for a “fast-growing national European retailer.”
While the specific retailer was not named, the automated warehouse site is projected to come online in fiscal 2028.
The facility will incorporate new technology from Ocado, including its robotic picking product and fully automated freezers.
Tim Steiner, chief executive of Ocado Group, said: “I am delighted that Ocado’s world-leading automation and robotics have been chosen to help boost the online operations of another leading retailer.
“Together with our agreement with Asda earlier this year, this partnership highlights the growing demand for our solutions across our technology offering.”
The deal is not expected to have a “material” impact on its financial results for the current financial year.
It comes after two major supermarket chains, Kroger in the US and Sobeys in Canada, said earlier this year they planned to close several of their robotic warehouses operated by Ocado amid weak consumer demand.
Last week, Ocado said it had held talks with potential new partners, including a “live engagement” with potential partners in the United States.
The expiration of several exclusivity agreements has opened doors for the group, allowing it to intensify its search for “multiple new feeding prospects” in North America, Europe and the Asia Pacific region.
The company also revealed Thursday that the one-time fees associated with these closure plans actually contributed to an increase in its revenue and profits over the past six months.
It revealed that the group's revenue rose 54 per cent to £1.04 billion for the six months to May 31, compared to a year earlier.
This was strongly linked to £354 million in rates and other income related to the proposed closures.
Revenue rose just 1 percent after excluding the one-time impact of closures.
Meanwhile, pre-tax profits rose to £17m, compared with a loss of £173m the previous year.
