Deliveroo, a leading UK food delivery platform, reported a rise in the value of customer orders in the first half of the year, leading analysts to predict an increase in annual earnings towards the top end of previous estimates. The firm recorded a gross transaction value of £3.69 billion (equivalent to €4.28 billion), a 6% growth rate from the previous year, adjusted for constant currencies and in line with analysts’ expectations.
As a result, the company stated that its yearly adjusted earnings before interest, taxes, depreciation, and amortisation are expected to land in the upper half of prior forecasts between £110 million and £130 million.
Deliveroo CEO Will Shu stated that the company was taking an “optimistically cautious” approach, given the various economic uncertainties. However, he suggested that adverse market conditions seemed to be easing. Since the lifting of COVID-19 lockdown restrictions, Deliveroo and comparable firms have sought to enhance profits by minimising costs, expanding their reach, and augmenting their main food delivery business.
Competitors, including Just Eat, Takeaway.com, and Uber Eats, witnessed an uptick in customer orders last quarter, partially because of partnerships allowing them to sell an assortment of items, not just restaurant food. Deliveroo’s efforts to diversify have included the introduction of a “Deliveroo Shopping” option on its app, through which customers can buy a variety of goods, from toys and electronics to cosmetics and home improvement items.
Analysts, such as Julie Palmer from Begbies Traynor, have commended Deliveroo’s adaptability and diversification in uncertain times, which have ultimately led to greater profits compared to slower adapting rivals. Lastly, Deliveroo announced a plan to repurchase £150 million worth of shares.