DELIVEROO said the value of customer orders grew in the first half and that earnings for the year will be on the higher end of its forecast after demand rose at the UK food delivery platform.
Gross transaction value rose 6 per cent at constant currencies from a year earlier to £3.69 billion (S$6.2 billion), the company said in a statement on Thursday (Aug 8). That was in line with the average estimate from analysts surveyed by Bloomberg.
Adjusted earnings before interest, taxes, depreciation and amortisation for the year is expected to be in the upper half of the company’s previous outlook for £110 million to £130 million, Deliveroo said.
Deliveroo is “optimistically cautious” when it comes to consumer sentiment, chief executive officer Will Shu said in an interview. “The headwinds certainly feel like they’ve abated.” Since Covid-19 lockdowns ended, Deliveroo and its peers have been cutting costs, exiting markets and venturing beyond their food courier businesses in a bid boost profitability.
Rivals including Just Eat Takeaway.com and Uber Eats saw orders accelerate last quarter in part because of partnerships that let them sell a range of products beyond restaurant food. Uber now offers deliveries from retailers such as Costco Wholesale and the Vitamin Shoppe, while Just Eat has also expanded to groceries and health and beauty products in recent quarters.
Deliveroo unveiled a “Deliveroo Shopping” section of the company’s app in November that lets users shop for toys, electronics, home improvement items and cosmetics. At the same time, the company rolled out a function allowing customers to send gifts of flowers or food.
“The rapid delivery firm’s ability to adapt to an uncertain consumer backdrop and diversify its offering has allowed it to reap rewards at a time when others have fallen behind,” said Julie Palmer, a partner at Begbies Traynor.
The company also announced a £150 million share repurchase plan.
Deliveroo shares rose 6.2 per cent to 135.40 pence at 08.46 am in London on Thursday after earlier jumping as much as 8.1 per cent, the biggest intraday gain since October. BLOOMBERG
