Ocado shares jump on loan deal and share issue

Ocado Group

Last Updated at 23 Oct 2014, 11:06 ET *Chart shows local time Ocado Group intraday chart
price change %
236.90 p -
-7.60
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-3.11

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Shares in Ocado have closed up by almost a quarter after the online grocer said it had extended a key loan agreement and seen improved sales.

The company also announced plans to raise a further £35.8m through a new share issue, helping to push its share price up by 14 pence to 75p.

For the 14 weeks to 11 November, total sales rose by 11% against a year ago.

Ocado made a £2.2m loss last year, compared with a £12.2m loss in 2010, but sales have risen sharply this year.

The company's existing lenders, Barclays, HSBC and Lloyds, agreed to extend the £100m loan facility for 18 months to July 2015.

The new shares will be offered to existing institutional investors, including members of the board.

"We are delighted that Ocado has achieved such strong endorsement from both its institutional and other shareholders and its lenders who support our confidence in our business model and growth prospects," said the company's chief executive Tim Steiner.

The additional money will be used for marketing and expanding non-food products, the company said.

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