Ocado to deliver on stock market?

You’ll have probably seen Ocado vans out and about on your travels as they make their Waitrose deliveries. Like most people you probably also thought that Ocado was part of the John Lewis / Waitrose empire.

Whilst Ocado delivers Waitrose-branded products (as well as other brands) the online service is an independent business. Ocado recently confirmed that it will float on the London Stock Exchange with the aim of raising £200m. Shares will be offered to institutional investors, employees and customers who have spent £300 or more so far this year.

Ocado, which was set up in 2002, has never made a profit but they did recently announce a 30% rise in sales, compared with the previous year, in the 24 weeks to 16 May 2010.
Why might shares in a loss making business be an attractive investment? How will the money raised impact the balance sheet? These are some of the issues explored on our finance training and business simulation programmes.