Teaming up with retailers such as B&Q, Screwfix and Ann Summers has helped Deliveroo boost its profit forecast, after the food delivery group recorded a strong rise in orders.
The FTSE 250 company, which debuted on the London Stock Exchange in 2021, told shareholders that adjusted net profit for the year to December 31 is likely to come in at the lower end of its £110 million to £130 million guidance.
Will Shu, founder and chief executive of Deliveroo, said “gross’s strong growth” and increased product variety had enabled the business to “bring more space to consumers’ doorsteps”. Last year, the company partnered with famous retail names including Perfume Shop and Not On The High Street.
Deliveroo said its total number of orders rose by 3 per cent to 77.5 million in the final quarter of last year, with the UK and Ireland accounting for 43.1 million of these orders — a 5 per cent jump on the same period last year.
Markets abroad proved more mixed. While the UAE and Italy saw continued growth, France showed “some continued market softness” and Hong Kong remained “difficult” due to strong competition from Chinese rival Meituan, which entered the market in May 2023.
Sean Kealy, an analyst at Panmure Liberum, suggested that Deliveroo might consider withdrawing from Hong Kong given the challenging situation there.
Deliveroo’s gross transaction value (GTV)—the sum total of all food orders and delivery charges—rose 7 per cent to £1.97 billion in the three months to December. Revenue for the quarter, which excludes restaurant and passenger fees, rose 6 per cent to £545 million.
For the whole of last year, revenue reached £2.07 billion, a 3 per cent increase, while GTV’s total was up 6 per cent to £7.4 billion from 296 million orders.
Founded in London in 2013, Deliveroo now operates in ten markets with around 180,000 restaurant partners, employing around 140,000 passengers. Shu, who used to deliver pizzas himself, has a 6.1 percent stake in the business, while Amazon is the largest shareholder, holding 13.7 percent.
While Deliveroo’s 2021 initial public offering was seen by some as a disappointment—its shares fell by nearly a third early on—Thursday’s positive trading update sent the stock up 6.6 percent, to close at 138p.
