Backing Ocado requires investors to maintain blind faith. The online grocery company is ploughing cash into rapidly building online fulfilment capacity on behalf of third-party retailers and its own joint venture with Marks & Spencer. The payback comes when those facilities reach sufficient scale and generate enough cash to counter the cost of signing new commercial partners. Yet the path to achieving the lofty earnings growth ambitions implied in the group’s market valuation is fraught with risks.
A deal to build fulfilment centres for Lotte, the South Korean retail conglomerate, sparked an increase in the share price of almost 40 per cent in one day at the start of November, the biggest daily rise recorded since Ocado signed its first significant international partnership with
