Tim Steiner has finally delivered the major international tie-up long promised to Ocado investors. This is a transformative deal for Ocado as not only will it expose the firm to a large chunk of the French market, it could also be the launch pad for many more international partnerships. Casino has more than 11% of the French supermarket sector.

Shorts got a roasting and there was evidence of some throwing in the towel as the stock careered +25% higher, even after yesterday’s pre-announcement moves. Worth noting that Ocado was among the most-shorted stock on the FTSE.

Ocado says the deal will have almost no impact to earnings this year as the financial year ends on December 3rd. Next year, Ocado expects the transaction to be earnings neutral with initial fees paid by Casino just about offsetting the costs of establishing the partnership.

There will be an additional capex charge of £15m next year and further capex investment required in future years.  But from 2019 Ocado is confident profitability will grow as the fees increase and as other deals are signed.

This is a big win for Tim Steiner, who has always assured investors that he expects to sign ‘multiple deals in the medium term’.

Investors should be relatively hopeful that this is just the start of a number of new deals around Europe. But they may want to watch just how much the technology investment eats up earnings and whether these deals increase the cash burn.