Losses at Deliveroo widened last year after the company spent more money on marketing and technology, as the London-based food delivery company warned it would remain unprofitable until at least mid-2023.
Company stock, which has since lost more than two-thirds of its value listed in London nearly a year ago, rose as much as 7 percent to 123 pence in early London trade after Thursday’s results as Deliveroo reported smaller losses than analysts had forecast.
Will Shu, Deliveroo’s chief executive, said its performance in the UK and Ireland was “particularly encouraging” as the company achieved profitability in its largest market on an adjusted earnings before interest, tax, depreciation and amortization basis. However, he also warned of “caution” for the coming year.
Takeaway app companies have come under pressure from investors to turn a profit after a few years of revenue growth during the pandemic.
After pandemic lockdowns boosted takeaway revenue, online delivery platforms are now facing a far tougher macro environment as food prices and wage inflation begin to take hold.
Deliveroo said so on Thursday growth of transaction volume would slow to 15-25 percent this year on a constant currency basis, compared to 70 percent in 2021, but losses relative to transaction volume would narrow.
“This year it is clear that all three sides of our marketplace [customers, couriers and restaurants] Europe will face headwinds due to inflationary pressures, the loss of economic stimulus and the broader geopolitical and economic implications of the conflict in Ukraine,” said Shu, who co-founded Deliveroo in 2013. “Our 2022 guidance reflects our caution on these factors, but we are confident in our ability to adjust financially to a rapidly changing macroeconomic environment.”
Shu said that Deliveroo aimed to break even “sometime” between the second half of 2023 and the first half of 2024.
Total revenue rose 57 per cent to £1.82bn in 2021, while pre-tax losses jumped 40 per cent to £298.2m. Orders rose 73 percent to 300.6 million.
After raising £1.1 billion in net proceeds from last year’s IPO, the debt-free company ended the year with £1.3 billion in cash and equivalents.
Deliveroo to remain unprofitable until next year Source link Deliveroo to remain unprofitable until next year