* Ocado CEO says Waitrose now understands Morrisons deal
* H1 EBITDA 19.2 mln stg, up 29 pct
* H1 pretax loss 3.8 mln stg
* Shares down 2 pct, up 275 pct in last year
(Adds CEO, analyst comments, detail, background, shares)
By James Davey
LONDON, July 2 British online grocer Ocado
believes long-term partner Waitrose is coming round to
its new joint venture with Wm Morrison Supermarkets,
reducing the risk that Ocado might lose its main supplier in the
Upmarket grocer Waitrose reacted angrily to Ocado's
deal with Morrisons when it was announced in May and instructed
its lawyers to seek to view the contract.
Ocado Chief Executive Tim Steiner said on Tuesday he had not
granted this request, but added Ocado had held talks with
Waitrose since the Morrisons agreement was unveiled on May 17.
"They probably understand now that the deal is absolutely
fine for us to enter into and will not breach our agreements
with them," he said.
Ocado's supply deal with Waitrose is due to run until 2020
and although there is a break clause in 2017, Steiner said it
was "absolutely not inevitable" that Waitrose would exercise it.
Waitrose declined to comment.
Shares in Ocado have risen nearly five-fold since November
and hit a record high last month after the 200 million
pounds-plus ($304 million), 25-year deal with Morrisons to
provide its online grocery operation by January 2014.
Steiner was speaking after Ocado posted a 28.7 percent rise
in underlying first-half earnings as it won new customers and
increased their average spend, though it still made a loss at
the pretax level.
Ocado said earnings before interest, tax, depreciation and
amortisation (EBITDA) were 19.2 million pounds in the 24 weeks
to May 19 - ahead of analysts' average forecast of 18.1 million
pounds, according to a company poll, and up from 14.9 million
pounds in the same period last year.
The firm made a statutory pretax loss of 3.8 million pounds,
versus a profit of 0.2 million pounds in the same period last
year, due to the investment it has made in its infrastructure.
Ocado has not made an annual pretax profit since it was
founded in 2000 by three former Goldman Sachs bankers.
Britain's traditional supermarkets are seeing little, if
any, growth in sales at their stores, but the online grocery
market is growing about 16 percent a year.
Ocado's first-half sales rose 15.2 percent to 382.7 million
pounds and the firm said it expected to continue to grow broadly
in line with the market.
"We remain well placed to take advantage of the accelerating
structural changes in the industry as more customers choose
online delivery for their grocery shopping," said Steiner.
Ocado shares were down 2.3 percent at 305 pence at 0845 GMT,
valuing the business at about 1.67 billion pounds.
"This remains a business that continues to be valued on
unsubstantiated potential rather than cash flows with high
visibility," said Shore Capital analyst Clive Black.
The stock has also been buoyed by bid speculation, with
Amazon seen as a possible suitor.
Steiner said he was unaware of any takeover approaches.
However, he said Ocado had received approaches from parties
interested in the firm's technology platform and operational
expertise and talks were ongoing.
"But we're not looking to make a quick announcement about
another transaction. We're looking to deliver on the existing
transaction (Morrisons) and continuing to invest in the
platform," added Steiner.
($1 = 0.6568 British pounds)
(Editing by Kate Holton and Mark Potter)