10th Aug 2023 12:50
(Alliance News) - Deliveroo PLC on Thursday announced it had halved its loss and upped its revenue in the first half of 2023, despite "challenging" macroeconomic conditions.
Russ Mould, investment director at AJ Bell, said the results showed that the online food delivery company was "making strides" in becoming a "more efficient" and "financially stable" business.
"Just imagine how it would be doing if the market environment had not turned against it," Mould added.
Deliveroo reported that its pretax loss halved to GBP57.6 million in the six months ended June 30, from GBP127.1 million a year prior. Revenue in the half totalled GBP1.02 billion, up 4.9% from GBP972.9 million the previous year.
The company also swung to adjusted earnings before interest, tax, depreciation, and amortisation of GBP39.4 million from an adjusted Ebitda loss of GBP51.6 million a year prior.
Neil Shah, director of research at Edison Group, noted that with "cutting back" on the minds of many consumers at the moment amid the cost-of-living crisis, Deliveroo's interim results show it commitment to the delivery of "resilient and adaptable" business.
"Its strategic focuses of streamlining marketing efforts, optimizing overheads, and harnessing the power of advertising, seem to be positioning the company well for its navigation of [the second half of 2023]," Shah said.
"Deliveroo's focus on quality service and value for money has allowed the company to maintain a strong revenue during [the first half] 2023, with the company's revenue remains on an upward trajectory," he added.
Deliveroo reported that its gross transaction value in the first half was GBP3.51 billion, up 2.7% from GBP3.41 billion a year before. However, the company lowered its GTV guidance for the rest of the year to lower single-digit percentage growth from low-to-mid single digit percentage growth.
GTV was GBP6.85 billion in 2022.
Adjusted Ebitda guidance, meanwhile, was raised to a range of between positive GBP60 million and GBP80 million from the previous guidance of positive GBP20 million to GBP50 million.
Adjusted Ebitda was a loss of GBP45.0 million in 2022.
"Looking ahead, we will continue to adapt to the evolving market conditions and execute against our strategy. We remain excited about the number of opportunities we have to drive further growth in the medium and longer-term, and we have the team and resources to capture these opportunities," said Founder and Chief Executive Officer Will Shu.
Deliveroo on Thursday also announced its proposal for a GBP250 million additional return of structural surplus capital. The firm said this would bring total capital return to shareholders announced in 2023 to GBP300 million, which is the equivalent to 30% of net cash at the beginning of the year.
Shares in Deliveroo were up 2.6% at 126.70 pence on Thursday afternoon in London.
By Heather Rydings, Alliance News senior economics reporter
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