Ocado Group PLC Annual Financial Report (6470E)
February 12 2015 - 02:00AM
UK Regulatory
TIDMOCDO
RNS Number : 6470E
Ocado Group PLC
12 February 2015
ANNUAL FINANCIAL REPORT
OCADO GROUP PLC
12 February 2015
Ocado Group plc
Annual Financial Report 2014
Ocado Group plc ("Ocado") has today submitted to the Financial
Conduct Authority's national storage mechanism its annual report
and accounts for the 52 weeks ended 30 November 2014 (as required
by Listing Rules 9.6.1 and 9.6.3).
The annual report and accounts for the 52 weeks ended 30
November 2014 is available to view on Ocado's website:
www.ocadogroup.com (in compliance with Disclosure and Transparency
Rule 6.3.5(3)).
Ocado's annual report and accounts for the 52 weeks ended 30
November 2014 will also be available for viewing at the Financial
Conduct Authority's national storage mechanism at
www.morningstar.co.uk/uk/NSM.
This announcement follows Ocado's announcement on 3 February
2015 of its preliminary results for the same period. A condensed
set of Ocado's financial statements and information on important
events that have occurred during the year and their impact on the
financial statements and related party information were included in
Ocado's preliminary results announcement. That information together
with the information set out below is the information provided in
satisfaction of the requirements of Disclosure and Transparency
Rule 6.3.5. The description of principal risks and uncertainties
below is extracted in unedited full text from the annual report and
accounts for the 52 weeks ended 30 November 2014. Reading this
announcement and/or the preliminary results announcement should not
be a substitute for reading the full annual report and accounts for
the 52 weeks ended 30 November 2014. This announcement and the
preliminary results announcement are available to view on Ocado's
website: www.ocadogroup.com.
Principal risks and uncertainties
We have identified 12 principal risks and uncertainties facing
Ocado. These are considered by the Board to be material to the
development, performance, position or future prospects of Ocado.
These risks, mitigations and changes during the year are summarised
in the table below. They are not set out in priority order. Further
information on risk is set out on pages 32 to 35 of the annual
report and accounts for the 52 weeks ended 30 November 2014.
Objective Risks Mitigation Action/Control Change During
The Year
=============== ================== ================================================================= ==============
DRIVING GROWTH Failure to
maintain * Continuation of our LPP basket matching price é
competitive comparison
pricing position Due to
increased
* Maintaining a competitive number of promotional competition
offers and increased availability of free delivery in the
slots for price sensitive customers market
* Creation of a choice of tiered price points within
each category
--------------- ------------------ ----------------------------------------------------------------- --------------
A risk of decline
in high service * Weekly monitoring of the key indicators and the ê
levels underlying drivers against published targets
Successful
increase
* Installation of additional capacity to reduce the in
pressure on the business and resiliency work in CFC1 operations
of CFC2
means
that both
CFCs
are
operating
with
sufficient
capacity
headroom
--------------- ------------------ ----------------------------------------------------------------- --------------
Failure to
maintain * Growth of the Ocado own label range alongside ê
a compelling continued provision of the Waitrose range
product range Range and
supply
* Growth of branded ranges and expansion of supplier base have
base increased
during the
year
* Alternative sourcing scenarios planned in the event
that the Waitrose sourcing relationship terminates
--------------- ------------------ ----------------------------------------------------------------- --------------
Failure to
continue * Continuation of investment and optimisation of the ê
to recruit marketing channels to acquire new customers
increasing Active
numbers of new customers
customers and grew and
retain existing retention
customers rates
improved
during the
year
=============== ================== ================================================================= ==============
MAXIMISING A risk of delays
EFFICIENCY in the * Dedication of resources to the modularisation of é
implementation technology and logistics systems to enable faster
of new capacity replication Future new
for both Ocado capacity
and Morrisons is reliant
* Preparation of plans for new capacity at CFC3 and on
CFC4 new,
unproven,
technology
=============== ================== ================================================================= ==============
UTILISING Failure to
KNOWLEDGE develop * Engagement with a wide number of international çè
a grocers to understand market needs
competitive Significant
model for further progress
commercialisation * Experienced teams in place who understand the current in
solutions and are aware of global alternatives used developing
in other industries the
commercial
offer but
higher
risks remain
until first
OSP deal is
signed
MONETISING Failure to
PROPRIETARY protect * Processes are operating to identify patentable çè
KNOWLEDGE current inventions and to apply for patents
technology Multiple
and process patents
and failure * Conducting extensive "freedom to operate" searches on now filed
to ensure that selected technologies but
our technology the value of
can be freely IP has
operated without increased
infringing a so
third party's increasing
IP the value to
others
=============== ================== ================================================================= ==============
OPERATIONAL A risk of a
food or product * Experienced legal, food technology and health and é
safety incident safety professionals monitor compliance against
policies and procedures Supplier and
product
numbers
* Supplier approval and certification process have
increased
and the
* Health and safety policies with appropriate market
operational procedures has become
more
sensitive to
product
issues
--------------- ------------------ ----------------------------------------------------------------- --------------
A risk of changes
in regulations * Regular monitoring of regulatory developments to çè
impacting our ensure that changes are identified
business
operations
* Monitoring operational performance to minimise
environmental impact
--------------- ------------------ ----------------------------------------------------------------- --------------
Failure of
technology * IT systems are structured to operate reliably and çè
or data loss securely
* Denial of service protection service is in place
* The security of our IT systems is regularly tested by
third parties
* No customer payment card data is held on Ocado's
databases
* Access to customer personal data is restricted to
those who need this information as part of their job
--------------- ------------------ ----------------------------------------------------------------- --------------
Business
interruption * Dedicated engineering teams on site with daily ê
maintenance programmes to support the continued
operation of equipment Opening of
more
spokes
* Insurers advise on engineering and risk management in reduces
the design and operation of the CFCs reliance on
any one
particular
* High level of protection for CFCs and equipment spoke
A risk of
unintentional * Issued a revised competition compliance policy in çè
infringement 2014
of competition
legislation
* Conducted training of key personnel and deployed an
e-learning tool for all personnel in every department
having access to trading data
* Physical and technical firewalls installed to
separate those teams who need to deal with
sensitive Morrisons'
data, in order to provide
the services to Morrisons,
from those running the
Ocado offer
--------------- ------------------ ----------------------------------------------------------------- --------------
The risk that future efficiency improvements may be limited,
previously reported in last year's annual report, is no longer
considered to be a principal risk because Ocado has reached a level
of efficiency sufficient to ensure the viability of the
business.
For further information on the financial risks see page 172 of
the notes to the financial statements.
Directors' Responsibility Statement
Ocado's annual report and accounts for the 52 weeks ended 30
November 2014 contains the following statements regarding
responsibility for the financial statements and the annual report
in compliance with DTR 4.1.12. This responsibility statement is
repeated here (below) solely for the purposes of complying with
Disclosure and Transparency Rule 6.3.5. It is not connected to the
extracted information presented in the preliminary results
announcement.
Each of the Directors who held office at the date of the
approval of this Annual Report (whose names and functions are
listed on pages 62 to 63 of this Annual Report) confirms, to the
best of his or her knowledge, that:
-- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Group; and
-- the "management report" (as defined in the Directors' report
on page 83) includes a fair review of the development and
performance of the business and the position of the Group, together
with a description of the principal risks and uncertainties that it
faces.
The Directors of Ocado Group plc are listed in the annual report
and accounts for the 52 weeks ended 30 November 2014 and are listed
on the Ocado Group's corporate website: www.ocadogroup.com. The
Directors of Ocado Group plc as at the date of this announcement
are as follows:
Stuart Rose;
David Grigson;
Tim Steiner;
Neill Abrams;
Duncan Tatton-Brown;
Mark Richardson;
Ruth Anderson;
Robert Gorrie;
Jörn Rausing;
Alex Mahon; and
Douglas McCallum.
Enquiries
For further information contact:
Ocado Group plc
Company Secretary Investor Relations
Neill Abrams David Hardiman-Evans +44 1707
Titan Court 228 000
3 Bishops Square investor.relations@ocado.com
Hatfield Business Park
Hatfield, Hertfordshire AL10
9NE
Fax: +44 (0)1707 227 997
email: company.secretary@ocado.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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