Proactive Investors - Deliveroo PLC (LON:ROO) is expected to return around £250 million to investors over 2024, analysts at Jefferies believe.
The delivery company is expected to have a closing net cash balance of over £700 million by the end of the current financial year.
However, this figure is likely to drop to £340 million when considering the £170 million set aside for legal provisions and the maximum of £200 million saved for contingent liabilities.
Another £50 million has been reserved for share buybacks to cover any compensation owed to employees.
This leaves Jefferies analysts, who have approached the breakdown with prudence, thinking that Deliveroo will close with a cash balance of around £300 million and will therefore launch a £250 million return of capital in the coming year (either through share buybacks or dividends).
Deliveroo has lifted more than 44% in the last twelve months, but Jefferies are still confident the stock can reach higher.
The New York investment bank thinks there could be a rise of cross-border mergers and acquisitions in the future and says that Deliveroo is well equipped to take advantage of this.
Based on this and the fact it operates with strong fundamentals, Jefferies has reiterated its ‘buy’ rating.
Shares in Deliveroo currently trade at around 128p.