MARKET REPORT: Ocado shares in demand as company celebrates victory in its ongoing legal battle with Norwegian rival AutoStore
Ocado shares were in demand as the company celebrated a victory in its ongoing legal battle with Norwegian rival AutoStore.
The grocery delivery group rose more than 10 per cent in early trading before closing up 1.1 per cent, or 13p, to 1195.5p after the US International Trade Commission (ITC) ruled in favour of Ocado on all counts.
It said Ocado had not infringed AutoStore’s patents with its warehouse robots, which are designed to automatically pack shopping orders for delivery.
Going in the right direction: Ocado rose more than 10 per cent in early trading before closing up 1.1 per cent
AutoStore will challenge the decision to the US Court of Appeals, while a similar showdown between the two firms is due to begin in the High Court next week.
Ocado welcomed the ITC ruling, noting that all 33 patent claims asserted against the firm by AutoStore had now been rejected for a second time or abandoned.
A spokesman for the company said it expected ‘further vindication in the High Court in London in the weeks ahead’.
Ocado and AutoStore are considered to be leaders in the fast growing market for automated warehouse robots, which has led to a global legal battle over which firm has the technology rights.
AJ Bell investment director Russ Mould said the patent dispute was ‘a major distraction’ for Ocado, which is also grappling with safety concerns after its robots caused two warehouse fires.
‘If Ocado can finally prove it isn’t copying someone else’s set-up, and that its bots are safe, it stands a better chance of accelerating the number of new customer signups – something the market has been demanding ever since the pandemic showed the importance of having a robust, efficient online grocery operation,’ Mould said. The FTSE 100 jumped 0.8 per cent, or 56.55 points, to 7155.64 while the FTSE 250 rose 1.3 per cent, or 251.06 points, to 20206.61.
Stronger than expected UK GDP growth for January helped lift investor confidence despite the looming conflict in Ukraine.
And comments from Vladimir Putin regarding positive developments in peace talks raised hopes of a resolution to the war.
Bargain hunters were also still cruising around the London market, which remains strongly down year-to-date and had left some shares looking cheap.
Tobacco giant BAT followed suit, announcing that its presence in Russia was ‘no longer sustainable’ and that it would look to ‘rapidly transfer’ the business while continuing to pay its 2,500 employees in the country.
As a result of the planned exit, the maker of Pall Mall cigarettes cut its guidance for 2022, estimating revenue growth of 2-4 per cent for the year, down from previous predictions of 3-5 per cent. The shares dropped 1 per cent, or 32p, to 3068p. Housebuilders leapt after an upbeat statement from Berkeley. The builder was up 1.3 per cent, or 50p, at 3811p after it remained on track to hit its guidance for the year to the end of April as reservations for its houses remained ‘slightly ahead’ of pre-pandemic levels.
Despite the upbeat performance, the firm said it was still grappling with inflation, supply chain disruption and planning delays.
The positive update sent shares up across the industry, with rival Persimmon rising 2.5 per cent, or 52p, to 2172p while Taylor Wimpey gained 2.8 per cent, or 3.7p, to 134.4p and Barratt climbed 1.9 per cent, or 10.2p, to 545.2p.
Mid-cap builders also climbed, with Bellway adding 2.6 per cent, or 71p, to 2768p, Crest Nicholson jumping 2.6 per cent, or 7.4p, to 289p, Redrow rising 3.3 per cent, or 17.6p, to 548.6p and Vistry gaining 1.3 per cent, or 12.4p, to 968.6p.
Anti-virus software group Avast joined the corporate exodus from Russia and Belarus. The firm was also providing free products to paying users in Ukraine Shares fell 0.2 per cent, or 1.4p, to 641.8p.