Ocado has announced that on 3rd June it signed an agreement with a regional European retailer to use Ocado Smart Platform (OSP).

Ocado will provide this partner with its full software platform, know-how and support services required to create an efficient and intelligent online grocery business, with orders initially fulfilled from its manually operated centralised warehouse.

The agreement gives the partner the right to request in the future the installation of automated mechanical handling equipment in centralised warehouses, powered by OSP technology, on terms to be separately agreed but within given parameters.

The partner will pay an upfront fee to Ocado for access to OSP, together with ongoing fees that are based on the volume of products sold online. Ocado expects the arrangement to be earnings and cash neutral in the current and 2018 financial years, and increasingly accretive thereafter.

Ceo of Ocado, Tim Steiner, said: “We are delighted that our partner has decided to adopt OSP for its online operations.  This is an exciting step in the evolution of our business and in the delivery of our strategy.

“The benefits of our integrated solution are clear. As this particular retailer looks to develop its online offering the agreement we have signed provides the flexibility to expand its capacity efficiently in the future. We look forward to working closely with our new partner in the months and years ahead.”

He added: “Our discussions with other retailers across the globe are ongoing and we continue to expect to sign multiple deals in the medium term.”