Ocado Group PLC (LON:OCDO) dropped after announcing a £500mln convertible bond issue and fourth-period revenues not as ripe as investors were hoping.
To help pay for the roll-out of robot-operated warehouses for its overseas clients and for general corporate purposes, the online grocery group is issuing bonds due in 2025 with a coupon of between 0.75% to 1.25% and a conversion premium of 40% to 45%.
READ: Ocado ups investment after winning deal with Japan's largest retailer
The announcement comes days after the winning of a contract with Japan’s largest grocer, Aeon, to set up a new online delivery business.
The FTSE 100-listed company also added a lukewarm update on the final 13 weeks of its trading year, where revenue growth at its UK joint venture with Marks & Spencer Group PLC (LON:MKS) softened to between 10% and 11% from the 11.4% in the 13 weeks to 1 September.
Full-year guidance for revenue growth for the Ocado Retail JV was set at between 10% and 15%, while the group's new 60-minute delivery service, Ocado Zoom, was likely to outperform retail revenue.
According to retailing analyst Nick Bubb, Ocado “ought to be doing a bit better than that, given all the extra customer fulfilment centre capacity it has laid down”.
Shares fell 7% to 1,235p on Monday morning, aligning with the price at close on Thursday, before Ocado announced the new deal with Aeon.