Ocado delivers share windfall for directors as boss Tim Steiner's stake is now worth £115m
Bumper return: Ocado chief executive Tim Steiner
The top team at Ocado is sitting on a small fortune after snapping up millions of pounds worth of shares in last year’s £38.5million share placing.
Directors dipped into their own pockets to take part in the fund-raising exercise, which took place with Ocado seemingly struggling to survive.
The online retailer has since enjoyed a resurgence that is already rewarding executives for their show of faith.
Chief executive Tim Steiner invested some £640,000 of his money in shares that are now worth around £4.25million. His near 5 per cent stake in the group is worth £115million overall.
Ocado launched its £38.5million share placing last year, offering new stock for 64p just days after they had hit a low of 58.5p. They are now trading at 425p per share.
Non-executive director Jorn Rausing, a cornerstone shareholder whose family founded packing empire Tetra Laval, pumped in £4million.
His investment is now worth £26.6million, while his 11 per cent shareholding is currently valued at just short of £280million.
The debt-laden delivery business, which a year ago looked to be staring into the abyss, has staged a remarkable turnaround.
The cash call came after six months in which the firm’s shares had halved on fears it would breach its bank loan covenants, placing its very future under threat.
Assessment: Ocado was one of the few stocks on Goldman Sachs 'buy' list on Thursday
But alongside the share placing, it signed a deal with its lenders – Barclays, HSBC and Lloyds – that extended its £100million capital spending facility by a further 18 months to July 2015.
It has since completed its second customer fulfilment centre – essentially a large distribution warehouse –and agreed a potentially lucrative deal with the Bradford-based Morrisons supermarket chain.
Meanwhile, the outlook for the company appears to be growing more upbeat, according to City of London pundits.
Tom Ewing, fund manager at Fidelity UK Growth, believes it will be one of the winners in a grocery sector that is undergoing some fundamental changes.
He said recently: ‘The share price has gone up because the market is starting to appreciate two things. Firstly, Ocado is not only a going concern but a growth company, and secondly, the company might have the most efficient business model in food retail.’
Ocado was also one of the few stocks on Goldman Sachs ‘buy’ list as it gave a rather downbeat assessment of the food retail sector on Thursday.
‘We believe that Ocado has developed a significant asset turnover advantage relative to the UK grocery industry with the development of a second customer fulfilment centre that builds on the learning from the first warehouse in Hatfield,’ it said in a note to clients.
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