Execellence » Ocada http://www.change-directors.com the resource for Change Directors Fri, 28 May 2010 13:02:59 +0000 en hourly 1 Home Delivery – a postscript.. http://www.change-directors.com/execellence/home-delivery-a-postscript/ http://www.change-directors.com/execellence/home-delivery-a-postscript/#comments Wed, 29 Jul 2009 21:33:47 +0000 Jon Nicholas http://www.change-directors.com/?p=72 There was an article in the Sunday Times this weekend (here) which reminded me of the home delivery ‘trap’ I wrote of a couple of weeks ago.  Ocado has been going for ten years, has never turned a profit (though makes £10m of underlying ‘ebita’), and the owners of the business hope to float the business on the Stock Exchange before it actually makes a profit.

What has clearly kept the business going has been the 3 founders capacity to raise the ever increasing sums of money to keep the business going – were it not for their backgrounds as Goldmans Sachs Bankers, I doubt the business would have survived.

The economics of home delivery are rubbish – even via the dedicated Ocada network.  The only way to keep the business going is to know how to raise the cash the business continually demands.

Maybe I am just jealous – if they do get the business to float, they net a cool £130m..

Jon Nicholas

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Post tags: Goldmans Sachs, Home Delivery, Ocada

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