|Bid||2,450.00 x 0|
|Ask||2,451.00 x 0|
|Day's Range||2,449.00 - 2,502.00|
|52 Week Range||994.01 - 2,914.00|
|Beta (5Y Monthly)||1.01|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jul 14, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||985.69|
Ocado Group plc (LON:OCDO) shareholders might be concerned after seeing the share price drop 10% in the last week. But...
(Bloomberg Opinion) -- Ken Murphy, the new chief executive officer of Tesco Plc, finds Britain’s biggest grocer in much better shape than his predecessor did when he took charge. It has prospered during the pandemic, helped by its big out-of-town stores and the ability to ramp up online capacity much quicker than its more fashionable internet competitor Ocado Group Plc.Taking the helm of a company in relatively decent health brings its own challenges. When Dave Lewis became CEO six years ago, he faced the worst crisis in Tesco’s 101-year history after an accounting black hole created a 250 million-pound ($323 million) profit shortfall. But it was obvious what he needed to do: Right the ship, strengthen the balance sheet and fight the increasing threat of German discounters Aldi and Lidl.Murphy doesn’t have such a clearly defined emergency mission. Tesco is chugging along nicely, forecasting on Wednesday that this year’s retail operating profit from continuing operations would probably be at least as good as last year’s. That’s despite the 725 million-pound additional cost to Tesco of managing the pandemic.The new boss, a former senior executive at Walgreens Boots Alliance Inc., still has plenty of work to do — including narrowing Tesco’s stock market discount to Ocado, an online-only grocer that also licenses its technology to other giant supermarkets. This year Tesco shares have slightly underperformed brick-and-mortar rivals such as J Sainsbury Plc. Murphy says new fulfilment centers in big stores for online deliveries will be a game changer for his company, helping it to chip away at Ocado’s position as web grocer of choice for Britain’s middle classes.Elsewhere, there’s more value to be wrung out of the near 4 billion-pound purchase of wholesaler Booker in 2018. Tesco used Booker’s vehicle fleet to provide an extra 100,000 click-and-collect slots during the pandemic. Murphy will also need to make a call on whether to close or expand Tesco’s Jacks value chain.And he could offload Tesco’s bank, which has never lived up to its promise. Murphy says there are no plans to sell the lender, but it’s an obvious source of cash if that were ever needed.The chief criticism of Lewis is that he didn’t cut prices quickly enough to meet the threat of the German discount giants. Aldi’s lack of a serious online business means Tesco has used the pandemic to win customers from it for the first time in a decade. This advantage will not last forever, particularly if the British economy deteriorates. Aldi U.K. said recently that it wouldn’t be beaten on price.Murphy appears to be acutely aware of the need to keep his foot on the price-cutting pedal. And he has the balance sheet firepower to do this. Net debt including store leases fell slightly to 12.5 billion pounds in the first half, while Tesco generated free cash flow of 554 million pounds from its retail operations.Eking out incremental sales growth and slogging it out daily with the no-frills supermarkets is hardly the stuff of retail management dreams, especially when compared with Lewis’s rescue job. But if Murphy can fine-tune Tesco — and use its strong cash generation to return even more capital to shareholders — they’ll forgive the lack of fireworks.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- AutoStore Technology AS is suing Ocado Group Plc for patent infringement, saying its warehouse system is at the base of the British online grocer’s technology, and is seeking to block its expansion in the U.S. and U.K.The Norwegian maker of automated storage and retrieval systems filed complaints in American and British courts, and is also seeking monetary damages. The company is seeking injunctions to stop Ocado and its U.K. partner, Tharsus Group, from “manufacturing, importing, using and selling technology that infringes AutoStore’s patents.” It asked the U.S. International Trade Commission (ITC) for an order preventing the importation of Ocado’s “infringing products.”The complaint comes as Ocado pushes to expand its model into new markets. The company earlier this week briefly overtook Tesco Plc as the U.K.’s most valuable retailer when its market capitalization reached 21.6 billion pounds ($28 billion). Much of that value comes from its place as a technology company and its potential to roll out automated warehousing systems and software to retailers globally.Multiple PatentsOcado shares fell 1% to 2,718 pence in London, where the U.K.’s FT-SE 100 Index rose 0.2%. Ocado said it has yet to receive AutoStore’s lawsuits, and said it isn’t aware of any infringement of any valid AutoStore patents.“We have multiple patents protecting the use of our systems in grocery and we are investigating whether Autostore has, or intends to, infringe those patents,” Ocado said in an emailed statement. “We will always vigorously protect our intellectual property.”AutoStore said that Ocado’s recently signed agreements with grocers Kroger Co. in the U.S., and Marks & Spencer Group Plc and Wm Morrison Supermarkets Plc in the U.K. “rely on the continued infringement of AutoStore’s intellectual property.”Earlier this week, Kroger said that its next automated warehouse powered by Ocado technology would be located in Romulus, Michigan.AutoStore was founded in 1996. Its technology is used in large warehouses to organize storage and prepare orders for customers in retail, healthcare and aviation, including Britain’s Asda Stores Ltd., Best Buy Co. in the U.S. and Deutsche Lufthansa AG in Germany.Ongoing Dispute“Our ownership of the technology at the heart of Ocado’s warehousing system is clear,” Karl Johan Lier, its chief executive officer and president, said. “We will not tolerate Ocado’s continued infringement of our intellectual property rights in its effort to boost its growth and attempt to transform itself into a global technology company.”The trade commission in Washington is a popular venue for patent owners because it works quickly -- it normally issues final decisions within 18 months -- and has the power to order products halted at the U.S. border.AutoStore also filed a civil suit in federal court in Arlington, Virginia, though it’s likely to be put on hold until the trade agency completes its investigation.The dispute between the two parties isn’t new, and Ocado has previously denied AutoStore’s accusations of patent infringement. The British company says that its automated warehousing system has unique hardware and software. It has filed more than 40 patents for its system.Ocado was founded in 2000 by three former Goldman Sachs Group Inc. bankers -- Tim Steiner, Jason Gissing and Jonathan Faiman. Only Steiner, who is CEO, remains active in the business. While it started out as online partner of Waitrose, the upmarket grocer, its main focus and growth potential now lies in selling licenses for its technology and delivery systems to large third-party retailers.AutoStore’s systems use “cube storage automation” -- where storage bins are stacked vertically in a grid that allows robots positioned at the top to retrieve the bins when needed. It said it first supplied technology to Ocado as early as 2012. Ocado’s Smart Platform also uses a system where robots move around a vertical grid system.AutoStore says its technology is the “foundation on which the Ocado Smart Platform was built” and alleges that there are several patent infringements relating to parts of the design and lifting mechanism of Ocado’s robots.(Updates with Ocado closing share price in second paragraph; Ocado statement in fifth paragraph; information on Ocado’s and AutoStore’s systems and the International Trade Commission process in final paragraphs,)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.