LONDON (SHARECAST) - Online grocer Ocado said sales growth slowed in the third quarter following disruptions to trading amid the Diamond Jubilee and the London Olympics celebrations.
Ocado said gross sales increased 9.9 per cent to £162.6m in the 12 weeks to August 5th 2012 compared to 12 per cent growth in the first quarter and below Panmure Gordon forecasts of 13 per cent sales growth in the third quarter.
The group, which issued several profit warnings last year, said year to date gross sales growth to the end of the third quarter was 11.3%.
While trading in June has suffered from Jubilee and Olympic events, the group still expects sales growth in the second half expects an increase in sales growth in the fourth quarter.
Average orders per week for the 12 weeks to Aug 5th increased by 8.6% to 120,494 while average order size for the period was £112.44 compared to £111.08 in equivalent period in 2011.
Chief Executive Officer Tim Steiner added: "The grocery market and the general economic picture remain challenging, with consumer confidence subdued and significant competitive couponing activity."
"Notwithstanding this environment, we have continued to build on the foundations we have put in place to deliver growth and operational improvement through the rest of this year and for the future, and we are targeting an increase in sales growth through the remainder of the period."
"Whilst we do not expect consumer pressure and volatility to ease in the immediate future, we anticipate an increase in the rate of sales growth in Q4," the group said.
Analysts at Panmure Gordon are reacting rather sceptically to Ocado´s results, indicating that the company may breach its net debt to EBITDA covenant this year. This after third quarter sales growth decelerated, rather than accelerated. They add that: "although we now believe that Ocado's days as a public company are limited, we don't think that the equity is worth very much." Not surprisingly, they have reiterated their sell recommendation on the shares this morning, with a 50p target.