Partnerships with retailers including B&Q, Screwfix and Ann Summers have helped Deliveroo boost its profit forecast after the food delivery group recorded a surge in orders.
The FTSE 250 company, which debuted on the London Stock Exchange in 2021, told shareholders that adjusted underlying profit for the year to December 31 is likely to be at the higher end of guidance of £110 million to £130 million.
Will Shu, Deliveroo’s founder and CEO, said “strong growth in groceries” and an expanding product range have enabled the company to “bring even more of the neighborhood to consumers’ doors”. Over the past year the company has worked with several well-known retail names, including The Perfume Shop and Not On The High Street.
Deliveroo said total orders rose 3 percent to 77.5 million in the final quarter of last year, with Britain and Ireland accounting for 43.1 million of these orders – up 5 percent from from the same period last year.
The overseas markets appeared to be more mixed. While the UAE and Italy saw continued growth, France showed “some continued market weakness” and Hong Kong remained “difficult” due to strong competition from Chinese rival Meituan, which entered the market in May 2023.
Sean Kealy, analyst at Panmure Liberum, suggested Deliveroo could consider pulling out of Hong Kong given the challenging environment there.
Deliveroo’s gross transaction value (GTV) – the total cost of all food orders plus delivery fees – rose 7 percent to £1.97 billion in the three months to December. Quarterly sales, excluding payments to restaurants and passengers, rose 6 percent to £545 million.
For the full year last year, sales were £2.07 billion, up 3 percent, while total GTV rose 6 percent 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 and around 140,000 passengers. Shu, who once personally delivered pizzas, retains a 6.1 percent stake in the company, while Amazon is the largest shareholder, with 13.7 percent.
While Deliveroo’s 2021 IPO was seen as disappointing by some (its shares fell by almost a third on debut), Thursday’s positive trading update saw the stock rise 6.6 per cent to close at 138p.