Deliveroo orders double up as lockdown trends continue
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The takeaway delivery giant said it took 148.8 million orders in the half year, up from 74.5 million in the same period last year. It also reported a doubling of gross transaction value, to nearly £3.4 billion.
The business has been boosted by a series of lockdowns over the past 16 months or so with restaurant closures and travel restrictions forcing consumers to order food online.
However, the firm said that so far it has proven fairly immune to the lifting of lockdowns, with “no material impact” from the UK reopening during the second quarter of the year.
Chief executive Will Shu told investors: “We are seeing strong growth and engagement across our marketplace as lockdowns continue to ease.
“Demand has been high amongst consumers. We have widened our consumer base, seen people continuing to order frequently, and we now work with more food merchants than any other platform in the UK.”
The group cautioned that the stellar growth would not last forever and the lockdown bounce is likely to ease off in the second half of the year.
It expects gross transaction value to grow between 50 per cent and 60 per cent this year, sticking to guidance it provided in July.
“As reflected in our guidance, whilst we expect that consumer behaviour may moderate later in the year, we remain excited about the opportunity ahead and our ability to capitalise on it,” Shu added.
While the group remains loss-making amid heavy investment, it trimmed its pre-tax losses from £128.4 million to £104.8m over the half-year period, on revenue of £922.5m – up 82 per cent.
It is less than five months since Deliveroo came to market with a volatile flotation that saw its share price fall back before staging a rebound.
Adam Vettese, an analyst at investment platform eToro, said: “After a calamitous start to life as a public company, Deliveroo is slowly winning over the doubters.
“The takeaway delivery service’s shares have risen strongly over the past five months since its disastrous March IPO [initial public offering], dubbed the ‘worst in London’s history’.
“Its order numbers and value have come in well ahead of expectations in the first half of the year, while its cash position has been materially boosted by the IPO.
“However, critics continue to challenge Deliveroo’s business model and the way it treats its workers, while it has also still never turned over a profit, although this is largely down to the fact it is investing heavily in growth.
“But eventually, investors will want to see both of those concerns rectified. If Deliveroo can’t do that, then it may find it a struggle to attract investors’ cash, regardless of whether its numbers impress or not.”
Deliveroo confirmed that it planned to end operations in Spain, as announced last month, as “achieving a top-tier market position would require a disproportionate level of investment with highly uncertain long-term potential returns”.