British food delivery company Deliveroo The company reported a small profit for the primary half of the 12 months, breaking even for the primary time following a rise in consumer demand.
The company, backed by e-commerce giant Amazon, said in its half-year earnings report on Thursday that it made a net profit of 1.3 million kilos ($1.65 million) within the six months to June, compared with a lack of 82.9 million kilos in the identical period last 12 months.
The company's earnings were the results of a “positive turnaround” in consumer demand, “with frequency returning and customer loyalty increasing, supported by improvements in our consumer value proposition (CVP).”
Deliveroo's gross transaction value rose 6% on a like-for-like basis to succeed in £3.7 billion in the primary half of the 12 months. Revenue rose 2% to £1,028.2 as the corporate reported a 2% increase in orders processed through its platform to 147.4 million in the identical period.
Deliveroo shares rose 8% to £1.37 by 11:40am London time following the discharge of the corporate's earnings report. Deliveroo shares remain well below their IPO price of £3.90. In 2021, the corporate's shares plunged as much as 30% on the day of its IPO.
“Looking ahead, despite ongoing uncertainty in the external environment, I am encouraged by the turnaround we are currently seeing in consumer behavior across most of our markets,” Deliveroo's CEO and co-founder said in a press release on Thursday.
“The Deliveroo platform is more powerful than ever and we continue to respond to the external environment while further optimising our offering for consumers, riders and merchants.”
Deliveroo also reported positive free money flow of £3.2 million in the primary six months of the 12 months, in comparison with negative free money flow of £27.7 million in the identical period in 2023.
There have been previous doubts about Deliveroo's ability to make a profit in food delivery – a historically high-cost, low-margin business that requires significant scale to stay competitive.
There has been increased consolidation on this area in recent times – in May, Uber acquired Delivery Hero's online takeout brand Foodpanda in Taiwan for $950 million to expand its Uber Eats platform.
The company expects its adjusted earnings before interest, tax, depreciation and amortisation for the total 12 months 2024 to be within the upper half of its previously forecast range of £110-130 million.
The goal of a gross transaction value growth rate of 5 to 9 percent by 2024 and the forecast for positive annual free money flow were maintained unchanged.
Deliveroo also announced a £150 million share buyback on Thursday, saying it might seek to purchase back a few of its issued shares available on the market to remove them from circulation and return money to the corporate's investors.
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