Food delivery player Deliveroo finally passed a “major financial milestone” by turning a profit in the first half of the year, it revealed this week.

Taking advantage of what it called a “stabilising consumer environment”, the group posted gross transaction value (GTV) growth of 6% in the six months to 30 June. Revenues were up 2% in constant currency. The figures were driven by returning order growth of 2% alongside growth in GTV per order, which was up 5% for the period.

Both its UK & Ireland and International arms saw solid growth. Constant currency GTV was up 7% in UK&I and 5% in international – the latter aided by improvement in France and continued strength in UAE and Italy.

The group also saw strong growth in grocery, which reached 14% of group GTV. That was driven by improved experience and awareness, and further penetration in mid-sized baskets (£30-£60).

Deliveroo said the results showed “encouraging signs in consumer behaviour”, with order frequency back in growth and retention improving.

Revenue growth was accompanied by stable gross profit margins, which underpinned strong growth in adjusted EBITDA of 57% to £62m.

Profitability was boosted by higher advertising contribution, efficiencies in the delivery network and overhead efficiencies, Deliveroo said.

That meant the group was able to post a profit for the period of £1m, compared with a loss of £83m in the same period last year.

Its outlook for GTV growth for the rest of the year remains unchanged at 5%-9%, but its adjusted EBITDA is now expected to be in the upper half of previous guidance of £110m-£130m.

Deliveroo shares jumped 10.4% to trade at 141.1p by Thursday lunchtime, their highest level since May and up 16.7% year on year.

Jefferies said “the quality of Deliveroo’s financial performance and financial position” was illustrated by the announcement of a £150m share buyback to return capital to shareholders.

Meanwhile, AJ Bell noted the move into profit “was also backed by positive free cash flow which, unlike profit figures, cannot be massaged to give a more favourable picture of performance”.

Panmure Liberum noted there could be a further boost for the shares in the near future: “With the LSE’s listing rules also now having changed, FTSE 250 entry could be on the table very soon, presenting the next likely upside scenario,” it stated.

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