Ocado’s retail business produced an unimpressive trading performance in Q4 FY20/21. The retail revenue slipped c.4% as the strength in orders per week was more than offset by a declining basket size. Management has guided for a £50m adverse impact on FY22 EBITDA. The lawsuit win against AutoStore is a shot in the arm but Ocado is still required to cement investor trust by adding more names to the client list (Solutions business). We maintain our positive recommendation on the stock’s valuation.
