On October 25, 2022, a deliveryman carrying a Deliveroo backpack rode a bicycle in Nice, France.
Eric Gaillard | Reuters
British food delivery company delivery boy The company posted a small profit in the first half, its first profit after rising consumer demand.
The company, which is backed by e-commerce giant Amazon, said in its first-half results on Thursday that it made a net profit of 1.3 million pounds ($1.65 million) in the six months to June, reversing a loss-making trajectory. situation.
The company’s results followed “positive changes” in consumer demand, with “frequency returning to growth and retention improving, supported by improvements in our consumer value proposition (‘CVP’).”
Deliveroo’s total transaction volume in the first half of the year increased by 6% to £3.7 billion in constant currency terms. Revenue rose 2% to £1,028.2 as the number of orders processed on the platform rose 2% to 147.4 million in the period.
Deliveroo shares rose 8% to £1.37 after the earnings report was released at 11:40am London time. Deliveroo’s share price remains well below its IPO price of £3.90. As early as 2021, the company’s stock price plummeted by as much as 30% on the day it went public.
“Looking ahead, while the external environment remains uncertain, I am encouraged by the current changes in consumer behavior in most markets,” Deliveroo chief executive and co-founder said in a statement on Thursday.
“The Deliveroo platform is stronger than ever and we remain responsive to the external environment while continuing to optimize our proposition to consumers, riders and merchants.”
Deliveroo also reported positive free cash flow of £3.2 million in the first six months of the year, up from negative free cash flow of £27.7 million in the same period in 2023.
Deliveroo has previously been questioned over its ability to make a profit from food delivery, a historically cost-intensive, low-margin business that requires scale to be competitive.
Consolidation in this area has been increasing in recent years – in May, Uber acquired Foodpanda, a Taiwanese online food delivery brand owned by Delivery Hero, for US$950 million to expand its Uber Eats platform.
The company said it expected full-year 2024 adjusted earnings before interest, taxes, depreciation and amortization to fall to the upper half of its previous guidance range of 110 million pounds to 130 million pounds.
The company maintained its total transaction value growth target of 5% to 9% in 2024 and maintained its guidance for positive annual free cash flow.
Deliveroo also announced a 150 million pound share buyback on Thursday, saying it would seek to buy some of its outstanding shares on the market with the aim of taking them out of circulation and returning cash to the company’s investors.
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