Equities Update: Ocado delivering

Ocado is once again delivering the goods for shareholders

Adam Vettese analyst at investment platform eToro, said: “Ocado’s updates continue to read well this year with the online grocer showing they have continued to eat away at market share, which has crept up 0.7% so far this year. This is no mean feat considering their competition ranges from established supermarket giants and heavy discounters alike. Orders are notably higher for Q1 year on year, perhaps indicating that some of those additional customers from their record Christmas last year have liked what they have seen and stuck around. Moreover, they will hope that this is a sign of a further switch from bricks and mortar to online shopping.

“Ocado now needs to stay on this trajectory, keep narrowing their losses and winning more market share on their road to profit. With shares trading 85% lower than their 2021 record high and even 50% lower than just last July, many investors may well be putting some stock in their baskets looking at the potential upside.”

Fevertree making strides in the US, but it’s too early to raise a toast

Fevertree investors might not yet be raising a toast to the company’s latest set of earnings. The UK drinks maker has seen an increase in market share in nearly all its operating regions in 2023, making significant headway in the US, which has for the first time outpaced the company’s UK domestic market performance. However, profits continue to flow in the wrong direction with global economic headwinds playing a major role.

Once blessed with margins over 50%, Fevertree has seen its margins decline closer to 30%, still not bad. But rising energy costs and inflation have hindered the business, in particular, increasing manufacturing costs of their glass bottles, something the company opted to suck up as opposed to passing the costs onto consumers and running the risk of losing market share.

With the Fevertree share price tumbling in recent years, loyal investors have had to endure the pain of a 70% drop so news that the business is beginning to flourish in the US is certainly a good sign. However, with cost-of-living pressures persisting in the majority of major economies, there are more signs emerging that pub and party goers are adjusting their spending habits, choosing to drink at home while being much more frugal on a night out. And with Fevertrees net cash position falling by 37% in 2023, more work will be needed to recapture the fizz of the 2018 highs.

Smiths growth figures bolster FTSE

Adam Vettese,, analyst at investment platform eToro, says: “The FTSE 100 held above 7900 on Tuesday, supported by robust earnings from Smiths Group and a bullish trading statement from Ocado. Ocado was the biggest riser in the index, gaining close to 7% by the afternoon after earlier revealing strong sales growth in its trading update.

“Engineering solutions firm Smiths Group was another notable performer, rising around 4% after also reporting burgeoning growth numbers. Its half-year results showed 3.9% organic revenue growth, while orders grew 16.5%, all against a record period of comparison. Particularly eye-catching was the performance of the Smiths Detection division – which provides security screening solutions – where orders rose an incredible 38%.

“Moving the other way, AutoTrader fell more than 4%, after JPMorgan Cazenove cut its earnings forecast for the company and warned of a ‘tougher market backdrop’ from declining prices in the used car segment over the past half year.”