Key facts
- Ocado has dropped its pursuit of a £190.7 million payout from Marks & Spencer.
- The payment was related to the performance of their joint venture, Ocado Retail.
- Ocado Retail reported a £12 million pre-tax profit in the six months to April.
- Ocado founder and CEO Tim Steiner will step down in approximately 18 months.
Ocado has quietly withdrawn its pursuit of a £190.7 million payout from Marks & Spencer concerning their joint venture, Ocado Retail. The FTSE-250 company had previously threatened legal action, asserting it was owed the sum based on undisclosed performance targets that were not met by M&S.
Ocado Retail, a 50-50 venture between the two companies, was established with an initial £560 million upfront payment from M&S for Ocado's delivery services. However, the subsequent performance targets were not achieved, leading to M&S withholding the additional payment.
Despite previous strong assertions from Ocado's chief executive Tim Steiner about being owed a substantial sum, the company has now dropped the claim. A spokesperson for Ocado stated that the focus is on building on the business's profitability and expanding order capacity, working with M&S to realize the venture's potential. Ocado Retail reported a £12 million pre-tax profit for the six months ending April.
Marks & Spencer, while acknowledging a good relationship and ongoing discussions with Ocado, is reportedly seeking technical improvements and better contract terms rather than focusing on the disputed payment. Meanwhile, Ocado faces challenges in attracting new partners for its warehouse technology business, and Tim Steiner recently announced his intention to step down as CEO in approximately 18 months following a boardroom disagreement.