Deliveroo PLC hailed a ‘good financial performance’ in 2023, and said it expects to be free cash flow positive this year.

For 2023, the London-based takeaway and grocery delivery firm reported a £10.9 million pretax loss, narrowing from £230.6 million in 2022.

It achieved adjusted earnings before interest, tax, depreciation and amortisation of £85.4 million, however, swinging from a loss of £45.0 million.

Revenue rose 2.8% to £2.03 billion from £1.97 billion. Gross transaction value was 3.1% higher at £7.06 billion from £6.85 billion.

‘During the second half of the year, food price inflation began to ease and the gap between food price inflation and wage inflation started to narrow. GTV growth improved from 1% in H1 to 5% in H2, both in constant currency,’ Deliveroo explained.

‘Overall, while we see some signs of stabilisation in customer behaviour, we continue to face a fragile consumer spending environment.’

It reported an adjusted Ebitda margin, as a percentage of GTV, of 1.2%, swinging from negative 0.7% in 2022.

Chief Executive Will Shu said: ‘2023 was a good year for Deliveroo and I am proud of what we have delivered financially, operationally and for our consumers. Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry. Alongside this, our restaurant and grocery businesses are performing well, we launched our retail offering, Deliveroo Shopping, and we are scaling our advertising business. Building on the strong progress we made in 2023, I’m excited about the further opportunities ahead.’

For 2024, it expects an adjusted Ebitda in the range of £110 million to £130 million. It predicts it will be free cash flow positive this year, after reducing its outflow to £38 million in 2023, from £243 million in 2022.

It targets GTV growth of 5% to 9% at constant currency this year. Analysts at Citi noted that consensus for GTV growth stands at 8%, so the mid-point of Deliveroo’s outlook sits below this. Citi itself has forecast a 7% rise.

Deliveroo shares fell 2.5% to 111.70 pence each in London on Thursday morning, returning some recent strength. Shares have risen 19% over the past 12 months. The stock is languishing 71% below its March 2021 initial public offering price of 390p, however.

Copyright 2024 Alliance News Ltd. All Rights Reserved.