Ocado’s tech gobbledygook has investors in a tizzy

Inside Business: Analysts are shrugging their shoulders after shares shot up despite a £143m first-half loss

Investors scrambled to get onboard Ocado’s lorries after its latest results (Reuters)

Online grocer Ocado wants everyone to understand that it is a tech company. To that end it has decided that it needs to take on some tech company trappings.

I’m not talking about a Silicon Valley HQ or the provision of chiropractors for staff like Google offers. No, Ocado is relying on talking the tech talk.

I’m going to quote what the company describes as the “key milestone” in its first-half results in full because it’s a doozy. Brace yourself for a looooong paragraph.

“Over the last six months, the centre of gravity at Ocado Group has shifted from our heritage as an iconic and much-loved domestic pure-play online grocer to our future as a technology-driven global software and robotics platform business, providing a unique and proprietary end-to-end solution for online grocery, and an innovation factory, applying our technology expertise to adjacent markets and other verticals.”

Look at that last bit in particular. Adjacent markets and other verticals? What the hell?

I’m tempted to wonder whether whoever wrote it was on something and whether it might be fun to sample it. Trouble is, I’d be out of the door and making an appointment to visit the local Jobcentre Plus faster than Ocado’s whizziest new robot can pick out a bag of frozen peas if I used that sort of language in a piece for The Independent.

I’m not saying I’ve not occasionally been guilty of submitting mangled prose. But if I ever rival that, well, shoot me.

Here’s what’s really scary for lovers of plain English, however. The market loved it. It lapped that statement up.

The media zeroed in on the £100m cost the company put on the fire that engulfed its Andover warehouse. But that will be covered by insurance, something the City was aware off.

Outside of that, Ocado reported a creditable 10.5 per cent jump in revenues, but also a £143m loss, not all of which was down to the fire. Nick Bubb, the longtime retail sage, described the numbers as “a bit light of city forecasts” having looked them over. Others said they were “in line”.

Despite that the shares leapt by nearly 10 per cent.

“It’s hard to know what drives city sentiment about Ocado,” said Bubb. Bernstein analyst Bruno Monteyne wondered whether the numbers “even matter”.

It doesn’t appear that they do.

Sophie Lund-Yates, at Hargreaves Lansdown, archly noted the “lack of new deals in the pipeline” for the company’s kit. Investors didn’t even pay head to that. They looked at Steiner’s words, thought yowza! Tech! This is the nearest we have to Blade Runner’s Tyrell Corporation. I want some of those shares in my back pocket for when they start producing replicants. And in they jumped. And the shares shot up.

Of course, there’s more going on here than the company’s embrace of tech gobbledygook.

Ocado is a company that has had more than its fair share of doubters. The prophets have regularly called its doom during its journey.

Steiner once proved that he can use English effectively when he described the business as an “18-year overnight success story” following a rash of technology sales that turned the corner for it.

The impact they had on the share price left a lot of investors cursing their past scepticism.

The stock’s sudden jump looked more than a little excessive given what it was based on, but Ocado has proved the doubters wrong before. Those who missed out decided they weren’t getting fooled twice. And if it all ends in tears, at least they’ll have company.