29 February 2024 , 11:44
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Ocado could take legal action against grocery partner Marks & Spencer over a payment dispute between the two businesses.
Ocado chief executive Tim Steiner said he is confident that Marks & Spencer owes the online grocer "a substantial amount of money" for its stake in their joint venture, Ocado Retail. Marks & Spencer is due to pay Ocado a final instalment of £190. 7 million as part of the payment for the £750 million joint venture, which was launched in 2019.
However, Ocado said the retail joint venture "failed to meet the performance measures" for the year needed to secure an automatic payment of the instalment. Mr Steiner said that the accounting rules have estimated that a payment of £28 million has been determined as fair value as a result.
However, he said this would be "ludicrously low". In the accounts, the company said it believes it will secure more than this "either via a formal litigation process or settlement".
Mr Steiner said on Thursday that it "would be best to come to a settlement arrangement". It came as Ocado posted a £394 million loss for the past year.
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It also revealed that the Ocado Retail joint venture delivered an underlying profit after criticism from its retail partner over the operation last year. Ocado has revealed a reduced pre-tax loss for the year to December, boosted by £187 million from a settlement with Norwegian rival AutoStore.