Top story
Online delivery giant Deliveroo has posted a first-half profit after returning to order growth in the period amid “encouraging signs” in consumer behaviour.
In what it called a “stabilising consumer environment” the group posted gross transaction value (GTV) growth of 6% while revenues were up 2% in constant currency.
Growth was driven by returning order growth of 2%.
Deliveroo saw good GTV growth in both UK & Ireland and international, with constant currency GTV growth of 7% in UK&I and 5% in international, where orders returned to growth driven by improvement in France and continued strength in UAE and Italy.
It also saw strong growth in grocery, reaching 14% of group GTV driven by improved experience and awareness, and further penetration in mid-sized baskets (£30-£60).
Deliveroo said the results showed “encouraging early signs in consumer behaviour”, with frequency returning to growth and retention improving.
Growth was delivered alongside a stable gross profit margin, which underpinned strong growth in adjusted EBITDA.
Adjusted EBITDA rose 57% to £62m, boosted by higher advertising contribution, efficiencies in the delivery network and overhead efficiencies.
That meant the group was able to post a profit for the period of £1m, compared to 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.
Will Shu, founder and CEO of Deliveroo, said: “I am pleased with the performance we have achieved this half, which was driven by effective execution of our growth and profitability initiatives. As a result, we reached two major financial milestones: positive free cashflow and positive profit for the period.
“We took important steps to make our CVP even more compelling. We innovated our loyalty programme, Plus, with the biggest changes since we launched the programme in 2017 as we continue to make strides towards our ambition to be a Plus-first business by 2026. I’m also delighted that we have further improved our Net Promoter Score, a key indicator of consumer satisfaction. I strongly believe consumer trust is the key to unlocking further growth in this industry and that is why we are relentlessly focused on achieving a flawless delivery experience, along with ensuring fair pricing for our consumers.
“Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets. The Deliveroo platform is more powerful than ever, and we remain responsive to the external environment while continuing to optimise our proposition for consumers, riders and merchants. We operate across attractive verticals, in large, underpenetrated markets, and it’s clear there is a lot of room for growth in our industry. I want to thank the Deliveroo team, whose talent and expertise is invaluable as we continue to capture the many opportunities ahead of us.”
Deliveroo shares have jumped 6.1% in early trading to 135.3p on the update.
Morning update
The FTSE 100 has opened down 1.1% back to 8,073.5pts this morning.
Fallers so far this morning include Naked Wines, down 3% to 51.6p, Domino’s Pizza Group, down 2.3% to 275.8p and Ocado, down 2% to 382.9p.
Risers include Glanbia, up 2.6% to €18.28, Kerry Group, up 0.8% to €85.60 and Nichols, up 0.4% to 1,140p.
Yesterday in the City
The market continued its rebound from sharp fall at the end of last week, regaining 1.8% to close at 8,166.9pts.
Risers yesterday including Just Eat Takeaway.com, up 11.4% to 1,042p, Hilton Food Group, up 4% to 909p, Tesco, up 2.8% to 329.3p, British American Tobacco, up 2.6% to 2,784p, Ocado, up 2.4% to 390.7p and Marks & Spencer, up 2.4% to 320.5p.
The day’s few fallers included THG, down 2.8% to 61.3p, WH Smith, down 2.6% to 1,216p, Domino’s Pizza Group, down 1.6% to 282.4p and Coca-Cola HBC, down 1.5% to 2,698p.
No comments yet