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Ocado has raised £450m in an upsized bond offering to refinance debt along with a separate £250m bond issuance.
The group announced last night it had priced an of £450m of senior unsecured notes due 2029 with a interest rate (coupon) of 10.5%.
That was upsized from its initial offering of £350m “due to strong demand”.
Ocado has separately announced and successfully priced an offering of £250m due 2029 with a coupon of 6.25%.
The net proceeds from the offerings, together with cash from balance sheet, are intended to be used to fund the purchase, a portion of Ocado’s outstanding 0.875% senior unsecured convertible bonds due 2025 and 3.875% senior unsecured notes due 2026.
These financing transactions are intended to extend the maturity profile of Ocado’s debt.
Barclays Bank, BNP Paribas, Goldman Sachs and Deutsche Bank acted as joint bookrunners on the offer.
On 16 July 2024, Ocado reported “strong” first-half earnings “demonstrating continuing financial, operational and strategic progress”.
The company reported revenue growth of £1.5bn, up 12.6%, resulting in a raise of 2024 margin guidance to mid-teens percentage, as well as an improvement to underlying cashflow.
Ocado stated: “It is clear that the global channel shift to grocery online has now resumed and Ocado is uniquely well-positioned to take advantage of this opportunity”.
Most recently, Ocado announced a new order from Kroger to install its latest proprietary automation across multiple Customer Fulfilment Centres (CFCs) in the US.
Ocado said it remained “resolutely focused on making continued progress over the rest of the financial year and beyond, as the business continues to grow into a profitable, cash-generating, technology business”.
Morning update
On the markets this morning, the FTSE 100 has opened down 0.3% at 8,261.7pts.
Risers this morning include PZ Cussons, up 2.5% at 106.6p, Kerry Group, up 1.4% at €85.60 and Haleon, up 1.2% to 362.2p.
Fallers include Just Eat Takeaway.com, down 3.6% to 945p, PayPoint, down 3.2% to 676p and Ocado, down 3% to 390p.
Yesterday in the City
The FTSE 100 fell back 1% to 8,283.4pts as the market reacted to the Bank of England MPC cutting UK interest rates by 0.25%pts.
Risers yesterday included Haleon, which was up 2.4% to 358on the back of its first half results.
Other risers included Science in Sport, up 2.2% to 23.3p, British American Tobacco, up 1.9% to 2,797p, Coca-Cola Europacific Partners, up 1.6% to 68.6p, Kerry Group, up 1.3% to €84.40 and Marks & Spencer, up 0.9% to 331.2p.
The day’s fallers include Nichols, down 9.4% to 1,110p, SSP Group, down 5% to 173.9p, Glanbia, down 4.7% to €17.82, Naked Wines, down 3.4% to 54.9p, THG, down 2.9% to 64.6p and B&M European Value Retail, down 1.9% to 459.1p.
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