Deliveroo reaffirms steerage on again of wholesome home commerce

Deliveroo expects to post its first year of positive free cash flow after the British food delivery firm enjoyed strong domestic sales over the summer.

The London-listed company’s total gross transaction value (GTV) – the worth of orders processed on its platform – increased by 6 per cent to around £1.8billion in the three months to 30 September.

Growth was overwhelmingly driven by the UK and Ireland, where Deliveroo said GTV expanded by 7 per cent to £1.1billion despite challenging economic conditions. 

This helped bolster weaker growth internationally, driving revenues for the quarter 4 per cent higher to £498million.

GTV only grew by 4 per cent internationally, with the firm noting the Paris Olympics caused ‘temporary disruption’ in France while Hong Kong remained affected by the ‘difficult competitive environment.’ 

But Deliveroo still expects to post annual adjusted earnings before nasties in the upper half of its £110million to £130million range.

It also anticipates total gross transaction value (GTV) – the worth of orders processed on its platform – will be 5 to 9 per cent higher on a constant currency basis.

Will Shu, founder and chief executive of Deliveroo, said the business was ‘well-positioned to capture the significant growth potential in an industry still early in its maturity’.

Shu sold nearly £15million of his company’s shares in September, not long after Deliveroo posted its first ever half-year profit, something he described as a ‘major milestone.’

The London-listed group made a £1.3million profit for the six months ending June, compared to an £83million loss over the same period last year.

It has enjoyed strong trading during 2024 on the back of increasing overseas sales, especially in Italy and the United Arab Emirates.

Deliveroo shares have risen by around 20 per cent this year as a result, although they remain far below their initial public offering price.

After listing in March 2021, its shares tumbled in value as loosening Covid-related restrictions led to people eating out again, slowing the company’s expansion, and investors expressed concern about staff working conditions.

They were further affected by the firm bolstering marketing, technology, and staff costs as it pursued breakneck growth. Deliveroo shares were 3.9 per cent up at 152.6p on Thursday morning.

Mark Crouch, market analyst at eToro, said: ‘Deliveroo has stayed committed to offering customers value and reliability during a period when food inflation threatened to eat away the company’s profit margins.

‘While the company is unlikely to see the same performance boom of the lockdown era, there are encouraging signs that the growth path the company is now on is much more robust and far less vulnerable to economic shocks.’