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Ocado raises £575m to fuel expansion

Online supermarket group, Ocado Retail has raised £575m in a share placing to fund its expansion, even as the surge in online food shopping during the pandemic recedes and soaring inflation puts pressure on shopper's spend.

The company stated, 'The net proceeds of the capital raise is expected to give the company enough liquidity to fund the requirements of its existing and expected customer commitments into the mid-term, driving strong growth and returns

It said the online grocery market continues to show 'significant' growth and that it needs to 'bring solutions to market even faster'.

'The urgency to bring online grocery solutions to market is at the forefront of customers' minds. Ocado Group is continually improving build processes to reduce time to launch, using its tried and tested technology, allowing the company to ramp up capacity at accelerated rates.

'Over the past year the company has materially accelerated the roll-out of Ocado Solutions Platform (OSP) globally, increasing the number of partners, geographies, sites and types of solutions deployed.

'In markets where OSP is live, the solution has enabled partners to achieve leading customer satisfaction results, without sacrificing long-term profitability. This partner success underpins Ocado Group's confidence in the large visible growth opportunity.'

Ocado Retail - a joint venture between Marks & Spencer and the Ocado Group - offers ocado.com and Ocado Zoom, the fast-growing, same-day grocery service.

For FY22, Ocado Retail , which is led by CEO Melanie Smith, expects its full-year growth rate to be close to 10%.

The company will open its Bicester customer fulfilment centre this year, which will add 30,000 orders a week at maximum capacity. Luton CFC is due to open in 2023. With two new sites in the north-west and south-east due to open in 2024.