Deliveroo lastly turns a full-year revenue – however its share value slumps

Deliveroo has scored a debut annual profit over a decade after Will Shu and Greg Orlowski set up the food delivery giant.

The London-based firm recorded a £3million profit in 2024, compared to a £32million loss the previous year, as well as positive free cash flow of £86million.

Since being founded in 2013, the group has persistently posted losses as its pursuit of breakneck growth has resulted in massive staff, marketing, and technology costs.

Problems were exacerbated after takeaway orders began slowing and cost-of-living pressures worsened following the loosening of Covid-related curbs on hospitality venues.

In response, the business exited markets such as Australia and the Netherlands and forged partnerships with major high street retailers in the UK like Boots, Waitrose and Morrisons.

It has also significantly reduced costs by cutting jobs, marketing and administrative expenses, as well as its reliance on technology contractors, and improved its service to save on compensation payments.

Congratulations: Deliveroo recorded a £3million profit in 2024, its first ever full-year profit

While Deliveroo’s orders declined by 3 per cent in 2023, they rebounded last year, rising by 2 per cent to 296 million as inflationary pressures eased and international sales recovered.

Gross transaction value – the total value of orders on its platform – also increased by 6 per cent to £7.4billion, while revenue rose by around £42million to £2.1billion.

Shu remarked: ‘Over the past year, we have been relentlessly focused on making the Deliveroo experience even better.

‘The robust results we’ve announced today, with our first full-year profit and positive free cash flow as well as GTV growth across our verticals, demonstrate that our strategy is working.’

Despite the result, Deliveroo shares slumped 4.7 per cent to 118.47 on Thursday morning, meaning they remain over 70 per cent down on their initial public offering price.

Deliveroo endured a disastrous public listing in 2021, losing more than a quarter of its value on the opening day of trading, prompting critics to brand the group ‘Floparoo.’

Investors expressed profound concern about the company’s lack of profitability, staff working conditions and the dual-class structure that prevented the stock from being included in FTSE indices.

The group also faces considerable competition from rivals like Just Eat Takeaway and Uber Eats to attract customers.

Susannah Streeter, head of money and markets, Hargreaves Lansdown, believes that if Prosus completes its £3.4billion takeover of Just Eat, this will represent a greater challenge for Deliveroo.

She said: ‘Prosus wants to get fingers in more pies where Uber has already found a sweet spot, eyeing up opportunity rights across the consumer-focused space.

‘While consumers have become accustomed to easy delivery at the click of an app, Deliveroo is going to have to pedal hard to get its hands on the yellow jersey.’