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Market report: Ocado's problems with Kroger in focus amid share slump

Kroger

After four years as the firm’s number one investor, KKR officially exited Trainline late last night.

The US private-equity giant has made a pretty penny from the ticket-buying app, having bought the company in 2015 for £450 million.

Since then Trainline has grown rapidly and floated with a valuation of over £2 billion in June.

Last night KKR, which had a 79% stake before the float, joined other investors Ares, Index Ventures and Alven Capital in selling 14.1% to institutional investors.

The group netted £279 million, but KKR walked away with the biggest chunk as it owned 12.4%.

Trainline has proved a rare IPO success story this year and a healthy cash cow for its investors and senior management.

Alongside KKR, chief executive Clare Gilmartin has also benefited from the float. She sold 4.6 million shares for

£16 million in June, making the 43-year-old Irish mother of three one of Britain’s wealthiest executives.

The stock was sold at 410p, a 7% discount to today’s price of 420p.

Another stock being closely watched was Ocado, as its shares fell for the fifth consecutive session amid mounting fears over its deal with US retail giant Kroger.

Ocado struck a three-year deal with Kroger in 2018 to build as many as 20 large warehouses.

But 18 months on only four warehouses have been formally announced. There is now growing scepticism about whether Kroger remains fully committed to the deal.

One broker said: “The capex required to build a warehouse is about $65 million (£51 million). It would be understandable if they are hesitating.” There are also concerns over whether the large out-of-town warehouses designed by Ocado are still fashionable.

Retail analysts say the trend is towards “micro fulfilment centres”, which are smaller in scale and can be bolted on to the back of supermarkets in towns and cities.

Ocado shares were down 9p to 1093p, adding to the 20% fall since last Monday.

Industrials group DCC was also struggling after it reported a 33% fall in half-year profit to £57.6 million.

The Dublin-based company has been hit hard by Brexit and its shares fell 276p to 7100p.

But the FTSE 100 did manage to eke out a small gain, up 15.10 points to 7344.31. The index was boosted by credit checker Experian, which posted a rise in revenue and profits.

SMALL CAP

Bluejay Mining, followed closely on AIM by retail investors, tried to soothe concerns over its business in Greenland. It has hired Joshua Hughes as exploration manager for the country, having led drilling campaigns there for the likes of Rio Tinto.

Bluejay has been under fire as many believe the project is not as big as management had suggested. The shares fell 0.1p to 10.10p.