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- The food delivery giant still expects to post positive free cash flow this year.
- Deliveroo also predicts that the total gross transaction value will be between 5% and 9% higher
Deliveroo expects to record its first year of positive free cash flow after the British food delivery company enjoyed strong domestic sales over the summer.
The London-listed company’s total gross transaction value (GTV) – the value of orders processed on its platform – rose 6 per cent to around £1.8bn in the three months to September 30.
Growth was overwhelmingly driven by the UK and Ireland, where Deliveroo said GTV expanded 7 per cent to £1.1 billion despite difficult economic conditions.
This helped fuel weaker growth internationally, pushing revenue for the quarter up 4 per cent to £498 million.
Forecast: Food delivery giant Deliveroo, founded by Will Shu (below right), has maintained its annual guidance after enjoying strong domestic sales over the summer.
GTV only grew 4 percent internationally, with the company noting that the Paris Olympics caused a “temporary disruption” in France, while Hong Kong continued to be affected by the “difficult competitive environment.”
But Deliveroo still expects to post adjusted annual profits before the unpleasantness in the top half of its £110m to £130m range.
It also anticipates that the total gross transaction value (GTV), that is, the value of orders processed on its platform, will be between 5 and 9 percent higher in constant currency.
Will Shu, founder and chief executive of Deliveroo, said the company was “well positioned to capture significant growth potential in an industry that is still early in its maturity”.
Shu sold almost £15m of shares in his company in September, shortly after Deliveroo recorded its first half-year profit, something he described as a “major milestone”.
The London-listed group made a profit of £1.3m for the six months to June, compared with a loss of £83m during the same period last year.
It has enjoyed strong trading throughout 2024 thanks to increased overseas sales, especially in Italy and the United Arab Emirates.
delivery actions As a result, they are up about 20 percent this year, although they remain well below their initial public offering price.
After going public in March 2021, its share value fell as the easing of Covid-related restrictions caused people to go out to eat again, slowing the company’s expansion, and investors raised concerns. by the working conditions of the staff.
They were hit even harder as the company boosted marketing, technology and personnel costs while pursuing breakneck growth. Deliveroo shares rose 3.9 per cent to 152.6p on Thursday morning.
Mark Crouch, market analyst at eToro, said: ‘Deliveroo has remained committed to offering customers value and reliability during a period when food inflation threatened to eat into the company’s profit margins.
“While the company is unlikely to experience the same performance boom as the lockdown era, there are encouraging signs that the growth path the company is on now is much stronger and much less vulnerable to economic downturns. “.
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