Long-suffering Ocado investors were cheered on Thursday after the online supermarket said it would achieve positive cash flow next year after a ‘strong’ first-half.

The group, which operates a joint venture with M&S and licenses its robotic warehouse technology to other retailers, has as yet failed to live up to expectations and become cash flow positive.

Investors have bet on the success of its robotic delivery technology, which has helped to drive market value, but its retail arm has lagged.

As a result, Ocado share have lost around 90 per cent over the last five years.  

While its retail business is one of the fastest-growing supermarkets, it is still one of the smallest in terms of market share, according to industry statistics.

In its first-half update, Ocado said its core priority is to turn cash flow positive during its next financial year, which starts in December.

Ocado reported a 76.5 per cent rise in underlying earnings in the six months to 1 June, the majority of which came from its technology arm.

It said adjusted Ebitda, its preferred profit measure, was £91.8million in the first-half, up from £52million in the same period a year earlier. Revenue rose 13.2 per cent to £674million.

Chief executive Tim Steiner said: ‘Ocado Group has delivered a strong first half and we have reached important milestones both in our UK business, as well as across our international partnerships.

‘Our Technology Solutions division has more than doubled EBITDA and our underlying cash flow has improved significantly, ending the period with liquidity in excess of £1 billion.

‘Our focus remains on turning cash flow positive during FY26, supported by continued growth with our partners and cost discipline across the business.’

Its full-year guidance remains unchanged.

Ocado shares jumped nearly 11 per cent this morning to 261.4p, but are still down 26.4 per cent over the last year, as investors grow impatient with the slow pace of its retail rollout.

Its biggest US partner, Kroger, eased the rollout of automated warehouses, while its Canadian partner Sobeys paused the opening of its fourth warehouse.

Mark Crouch, market analyst for eToro, said: ‘Ocado continues to test the limits of investor patience. Once viewed as a pioneer in grocery logistics, the company’s downward spiral has become a case study in hype over substance. But is that now about to change?

‘Management claims the business will be cash flow positive by next year, a target that, while encouraging, comes after several years of missed milestones. The market has learned to treat such guidance with caution.

‘Much of Ocado’s appeal has rested on its technology licensing model, but the pace of adoption has been slow, and the returns even slower. The tie-up with M&S continues to offer some operational ballast, yet it doesn’t resolve the broader question of whether Ocado’s core proposition can generate sustained, profitable growth.

‘And until Ocado demonstrates that it can convert technical sophistication into reliable financial performance, investors may be right to remain sceptical.’