Deliveroo shares were on the up on Thursday despite the takeaway giant cutting its growth forecast, as the City reacted approvingly to increased revenue from fewer customers.

Despite “challenging macroeconomic conditions”, the group posted a 3% rise in gross transaction value in the first half of its financial year (up 1% in constant currency), with overall revenues up 5% to just over £1bn.

The delivery giant hailed this as a “resilient” performance in the context of high food price inflationputting pressure on consumer spending power and affecting demand for food delivery. Additionally, it noted Covid-related restrictions in Asian markets in early 2022 had created a tough comparison base.

Growth was driven by pricing. Gross transaction value per order was up 10% in the period, mitigating a 6% drop in order numbers.

Despite this drop in orders, adjusted EBITDA increased to £39.4m, up from £6.6m in the second half of 2022 and a £51.6m loss in the comparable period last year. EBITDA margin reached 1.1% in the period – an improvement of 260 basis points versus the same period last year.

Deliveroo said margins were boosted by last year’s optimisation of consumer fees to reflect delivery distance. It also pointed to its adjustment of the balance between delivery fees and service fees, and the increasing contribution of advertising. Marketing and overheads also decreased further to £325.7m from £348.3m year on year.

As a result, the group upgraded its adjusted EBITDA guidance to a range of £60m-£80m, from a previous guidance range of £20m-£50m. However, 2023 GTV growth guidance narrowed to lower single digits percentage growth in constant currency from previous guidance of low-to mid- single digits growth.

Adam Vettese, an analyst at investment platform eToro, applauded the “promising set of results”, noting its recent share price gains even before this week’s boost. “The picture might not be so rosy were the UK to fall into recession, which is increasingly being touted by economists. But for now, the firm is dealing with choppy economic waters fairly well.”

Neil Shah, director of research at Edison Group, added: “With ‘cutting back’ on the minds of many consumers, Deliveroo’s interim results display its commitment to its delivery of resilient and adaptable business. Its strategic focuses on streamlining marketing efforts, optimising overheads, and harnessing the power of advertising, seem to be positioning the company well.”

Deliveroo shares were up 2.6% to 126.7p in morning trading on Thursday and are up by almost 43% so far in 2023. However, prices remain less than half of mid-2021 highs.

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