Ocado generates £45.1m from running Morrisons.com

OCADO’S partnership with Morrisons to fulfil orders placed at Morrisons.com “has continued to ramp up well” in its first year.

Although Morrisons has faced criticism for taking so long to offer customers an online service, the launch of Morrisons.com last January has been satisfactory, meeting the expectations of both partners in the joint venture.

Morrisons.com uses Ocado’s existing distribution centres, which is a model that Ocado wants to extend with partnerships with other online businesses in the UK and internationally.

Ocado, which reported adjusted pre-tax profit of £10.1m for the year to November 30, received £45.1m in recharges and fees from Morrisons. This was split into £27.8m recharged for distribution costs and administrative expenses and £17.3m in licence and management fees and support for technology and R&D.

Tim Steiner, Ocado’s chief executive officer, said: “Our leadership in IP and technology affords us opportunities to generate significant value for Ocado through the commercialisation of our IP.
 
“The first commercialisation of this IP was our agreement with Morrisons which was completed in July 2013 and we were pleased that Morrisons.com was launched as planned with the first orders delivered on 10 January 2014.  Morrisons.com uses our existing CFC [customer fulfilment centre] technology and solutions and has continued to ramp up well in line with our and Morrisons’ expectations.

“We continue to receive interest from a broad group of potential international partners to discuss how we might assist them in introducing or improving online business in their own markets.”