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Deliveroo doubles orders value even as lockdowns ease

Stock MarketsAug 11, 2021 14:21
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© Reuters. FILE PHOTO: A deliveroo delivery driver cycles through the centre of Manchester, Britain, March 8, 2021. REUTERS/Phil Noble

By Paul Sandle

LONDON (Reuters) -Food delivery company Deliveroo said the value of orders on its platform more than doubled in the first half, with no material impact from the wider reopening of restaurants in its biggest market, Britain, in the second quarter.

Chief Executive Will Shu said growth had remained strong for both restaurant and grocery orders even as pandemic-related curbs eased.

"Demand has been high amongst consumers," he said in a statement on Wednesday. "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 company, which connects customers with over 136,000 restaurants and 9,000 grocery stores in Britain and 11 other countries, said its gross transaction value (GTV) rose 102% to 3.386 billion pounds ($4.68 billion).

German rival Delivery Hero took a 5.09% stake in Deliveroo last week, driving the British company's share price to its highest since its March initial public offer (IPO).

Shu said he had not had any talks with Niklas Oestberg, his counterpart at Delivery Hero, since the move.

"I think his view was: the stock's undervalued, I'm gonna start buying, and I know the space super well," Shu told Reuters.

"This is in my view just a financial investment."

Deliveroo's shares, which were priced at 390 pence in the IPO, were trading down 4% at 348 pence at 1008 GMT, as it said it was "optimistic but prudent" about its prospects.

The company, which competes with Uber (NYSE:UBER) Eats and Just Eat Takeaway.com, said it expected orders to continue to grow but average order values to revert towards pre-pandemic levels.

It reiterated the full-year forecast it upgraded last month of 50-60% growth in GTV, with a full-year gross profit margin in the lower half of the 7.5-8.0% range.

First half revenue increased 82% to 922.5 million pounds, Deliveroo said, while its core operating loss narrowed to 27.0 million pounds from 30.3 million pounds a year earlier.

($1 = 0.7234 pounds)

Deliveroo doubles orders value even as lockdowns ease
 

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