Deliveroo shrugs off restaurant reopening to double value of orders to £3.4bn
Written by Hit Music Radio News on 11/08/2021
Deliveroo says the value of orders on its platform more than doubled in the first half of its financial year despite the reopening of restaurants as coronavirus restrictions eased in its main UK market.
The meal delivery company, which connects customers with more than 115,000 restaurants and grocers in the UK and 11 other countries, said its gross transaction value rose 102% to £3.4bn during the six months to June.
It reported that demand had remained “resilient” since May when indoor dining was allowed again in the UK thanks to falling COVID-19 cases at that time, with “no material impact” on sales.
Deliveroo’s revenue rose 82% to £922.5m but its bottom line continued to be hurt by investment in its offering and expansion.
Statutory pre-tax losses came in at £104.8m though that was down from £128.4m in the same period last year.
The company said its services now covered 72% of the country – exceeding a target of 67% by the year’s end.
Deliveroo maintained already upgraded full-year guidance but that was not enough to win over wary investors.
While shares in Deliveroo – which suffered a lacklustre market debut in March – rose by more than 2% in the wake of the trading update to 371p, they later fell back into negative territory and were trading 3% down on the day at 356p.
They were valued at 390p each in the flotation.
Shares have endured a rocky ride, market analysts have said, because of concerns over working practices and a controversial share structure that gives founder and CEO Will Shu greater control over the business.
The stock gained ground earlier this month on news German rival Delivery Hero had taken a 5% stake in the firm.
Mr Shu told the Reuters news agency on Wednesday that he viewed the move as a financial investment – signalling he did not believe it represented the start of a potential move on Deliveroo.
“I think his (Delivery Hero CEO) view was: the stock’s undervalued, I’m gonna start buying, and I know the space super well,” he added.
© Sky News 2020