Online delivery company Ocado has revealed that a fire which tore through its Andover warehouse in February cost the company £110m.
Ocado is known for its UK grocery delivery service but also builds semi-automated grocery warehouses for global clients. Ocado stated that the fire has cost £110.3m so far, minus £11.8m of insurance payouts. The £98.5m loss has dealt a blow to Ocado’s accounts, though the company’s finance director Duncan Tatton Brown expects further insurance proceeds over the course of the year.
The cost of the fire damage pushed Ocado to a £142.8m half-year loss and dented sales by 2%.
The fire started due to an electrical fault which caused a warehouse bot to catch alight. The Andover warehouse was previously used to showcase Ocado’s semi-automated warehouse model.
Despite the damage and ongoing costs, Ocado’s chief executive Tim Steiner is optimistic about the firm’s outlook. He said: “The innovation factory we have created is founded on a near twenty-year heritage of constant re-examination and reinvention of technology to provide the best customer experience.
“We have never had as many opportunities to grow as we do today.”
Shares in Ocado have risen more than 50 per cent so far this year, despite losses of £45m in 2018. The firm’s resilience can be attributed to its robotic warehouse technology and home delivery deals with a growing list of global customers, including Kroger, Coles, Casino, Sobeys, and Marks and Spencer.
The damage from the four-day fire is set to cost an additional £15m over the rest of this financial year. Ocado is also going ahead with a £10m shares-based bonus payout to its management.
The Andover warehouse is currently being rebuilt. Construction of another warehouse in Essex will begin shortly.