The Times - UK (2021-12-06)

36 2GM Monday December 6 2021 | the times

Business

only 1.8 per cent of the market at

present, and she admits that she should,

perhaps, go for an intermediate goal of

being “No 1 online grocer instead”.

Doing that would still require Ocado

Retail to overtake Tesco and Sains-

bury’s, which carry out more than a

million online orders a week, compared

with Ocado’s 338,000, but Smith is

from shelves to cope with Covid demand

online, Ocado’s robotic warehouses take

two years to build and kit out and can

process only a finite number of orders.

When Ocado suffered its second fire in

two years at its Erith site in southeast

London in June, sprinkler systems

meant its mechanised grid didn’t suffer

too much fire damage, but the water still

caused huge disruption and £35 million

in lost sales.

According to Smith, 48: “The one

thing we learnt in Covid is you stay on

your toes and you figure out to how to

solve the problem in front of you.” Her

“aspiration is that we should be the No 1

grocer in the UK”, which may sound

outlandish, given that Ocado boasts

Ocado is using its up-to-date robots and rapid deliveries in parts of London to put a fire at its Hampshire warehouse behind it

1

As Britain braced for more

inclement weather, Kwasi

Kwarteng, the energy secretary,

criticised energy companies for

the “totally unacceptable”

response to Storm Arwen that left

thousands without power for more

than a week. Page 3

2

The NHS is seeking to sign

new contracts worth up to

£10 billion with private

hospitals to carry out scans and

treatment including cancer care,

as part of plans to tackle the

5.8 million-strong waiting list.

Page 8

3

Emergency government

contracts will no longer be

handed out without

competition in a shake-up of the

state’s £300 billion expenditure,

which aims to avoid a repeat of

Covid “VIP-lane” controversies.

Page 8

4

Economists have cut their

growth forecasts for next year

amid concerns about rising

costs, shortages and the possibility

of more Covid restrictions. CBI

economists predict 6.9 per cent

growth in GDP this year and

5.1 per cent next, down from its

June forecasts of 8.2 per cent and

6.1 per cent, respectively. Page 35

5

An anonymous investor is

cutting its stake in Klarna and

offering the shares to small

investors in the UK at a 5 per cent

discount to the $46 billion

valuation that the Swedish “buy

now, pay later” credit company

achieved six months ago. Page 35

6

Ocado Retail is looking to

increase the number of its

warehouses as the online

grocery group pursues an

ambitious long-term aspiration

from its boss to be “the No 1 grocer

in the UK”.

7

BT will be the focus of

attention when the London

stock market opens this

morning after weekend reports

that Discovery, the American

media company, is in talks about a

joint venture for their respective

sports businesses.

8

As details of an alleged fraud

at Arena Television emerged,

some onlookers expressed

shock at the scale of the supposed

scam at the outdoor broadcast

company and the number of banks

and non-bank credit providers

caught up in it; however, others in

the leasing and asset-based

lending industries said they were

surprised only that something like

this had not happened before.

Page 38

9

Share indices have rallied a

little after the emergence of

the Omicron variant of Covid-

19 caused a stock market sell-off

that led to the FTSE 100 having its

worst month for more than a year.

If volatility is here to stay, there

could be a more pronounced flight

to perceived safe-haven

companies. Page 40

10

Bitcoin stabilised at about

$49,000 after briefly

plunging by almost

$10,000 in a few minutes on

Saturday as investors pulled back

amid concerns about the impact of

the Omicron variant on the global

economic recovery. It had started

the week at $57,900. Page 41

Need to know

Ocado’s robot army marches

The pandemic has

brought a greater focus

to the pacesetter in

online grocery, reports

Ashley Armstrong

When lorry drivers pulled into Ocado’s

warehouses at the crack of dawn during

the pandemic, they didn’t expect to see

“the gaffer” emerging from the back of

a Berlingo van.

Melanie Smith, chief executive of

Ocado Retail, spent part of the Covid

outbreak sleeping in the company’s car

parks in a second-hand Citroën, some-

thing that she can laugh off now as

having been the most practical way to

get around its warehouses when most

of the country was in lockdown.

But it was also necessary. Those

warehouses are the key to Ocado

Retail, the digital supermarket half-

owned by Marks & Spencer that has

found itself at the heart of a pandemic-

driven boom in online grocery shop-

ping. They are the shop front for Ocado

Group, the £12.2 billion London-listed

business that licenses robots, software,

vans and logistics to retailers world-

wide. And, crucially, they are increasing

in number.

Ocado’s newest warehouse in

Purfleet, Essex, serves 34,000 orders a

week but is destined to make that

90,000 when it is at full capacity. Its

latest-generation robots traverse a grid

20 storeys high and manipulate crates

of groceries that they deliver to pickers

to assemble orders or ferry to a bay to

be loaded into vans, something that

the New Zealand-born Smith likens to

“robot ballet”.

Purfleet was the third Ocado ware-

house to enter operations this year after

the reopening of a site in Andover,

Hampshire, which had been closed

since a fire in 2019, and a mini site in

Bicester, Oxfordshire. It takes the total

to seven, including a warehouse in

Canning Town, east London, for the

company’s one-hour Zoom service.

Another site is due to add to the total

shortly in Luton, north of the capital,

while Smith has the next ten years of

openings plotted out. Scotland is a

logical step as M&S already has a big

food market share there, an area that

Ocado’s network doesn’t yet reach.

Unlike traditional supermarkets,

which took little time to hire tens of

thousands of people to pick groceries

Activist ‘has eye on Taylor Wimpey’

The board of Taylor Wimpey has been

put on alert after it emerged that an

activist investor was building a stake.

Elliott Advisors, the American hedge

fund that has been lobbying for board

changes at GlaxoSmithKline, has built

a small stake.

The housebuilder, one of Britain’s

biggest, operates from 23 regional

businesses in the UK and constructs

homes ranging from flats to six-bed-

room houses. The company, which has

been led by Pete Redfern, 51, since 2007,

built about 15,500 homes in 2019 and is

expected to complete about 14,000

homes this year.

Sale prices and margins have

improved as the housing market has

taken off after an initial shutdown

at the start of the pandemic. The com-

pany has forecast that this year’s oper-

ating profit will be in line with expecta-

tions of about £820 million, up from

£300.3 million in 2020 but lower than

the £850.5 million recorded in 2019

before Covid-19 emerged.

A market source said that Elliott’s

stake could be as little as 0.1 per cent.

Elliott declined to comment on the size

of its stake or its intentions. The Beta-

ville blog, which first reported that

Elliott had built a stake in Taylor

Wimpey, saidthat the investor had

done so with a view to encouraging

“corporate activity”, which may include

a takeover.

Analysts at Investec, which initiated

coverage of Taylor Wimpey last week,

said that the group was “back on track

to generate a strong level of free

cashflow to support its ordinary divi-

dends and potential special dividends

or share buybacks.” They expect the

business to focus on managing the

cycle, improving margins and return-

ing significant capital shareholders.

Areas where analysts were more

bearish and where investors could push

for change included the future of Taylor

Wimpey’s non-core business in Spain,

cost and margin pressures and the

“questionable” need for a recent fund-

raising to invest in land.

Elliott made a big bet on the housing

market this year when it teamed up

with Jeff Fairburn, the former boss of

Persimmon, to buy Avant Homes

Group. Avant builds about 2,000

homes a year from the Midlands to

Scotland.

Taylor Wimpey’s share price has

risen 3.4 per cent so far this year, giving

it a market capitalisation of £5.9 billion.

The company declined to comment.

Louisa Clarence-Smith

Fifth of new

cars on road

are electric

Robert Lea Industrial Editor

About one in five new cars sold in

Britain in November were fully electric

plug-in vehicles, the highest proportion

recorded in a normal month outside

lockdowns.

Of the new cars registered last

month, more than 20,000, or almost

19 per cent of the total, were zero-

emission vehicles, according to New

AutoMotive, a green motoring consult-

ancy, which released its figures before

the publication of official industry data

today.

While the 20,000 is, numerically, not

higher than the 32,000 battery-electric

vehicles registered in September, a key

month for sales when number plates

3.4%

Increase in Taylor Wimpey share price

so far this year

London Stock Exchange