After a disastrous start to life as a public company led some wags to denote takeaways platform Deliveroo (ROO) ‘Flopperoo’, the company continued to put up decent growth numbers.
Both the value and volume of orders came in ahead of what was expected in the first half and its coffers look pretty full, bolstered by the IPO cash.
In the six months to 30 June, gross transaction value rocketed 102% to £3.3 billion with revenues up 82% to £922 million. Statutory loss before tax improved to £104 million from £128 million in 2020, while cash and cash equivalents at period-end were £1.6 billion.
Guidance remains of 50% to 60% growth in gross transaction value and 7.5% to 8% gross profit margin.
Yet the platform remains miles away from making any actual profit. Losses racked up at £104.8 million, and while that was £24 million lower than a year ago, it is difficult to see a pathway to meaningful profits.
That, presumably, is why the share price plunged nearly 5% to 347p.
News that German rival Delivery Hero has taken a 5.09% stake in the business appears to have lifted the share price yet hopes that the this is a precursor to a full bid look premature given Deliveroo founder Will Shu has a controlling position under the company’s dual class structure which would allow him to rebuff any deal for the next three years.
‘Deliveroo critics will continue to point to issues with the way it treats its delivery riders and the fact it is still a long way from serving up a profit, despite its recent bumper trading,’ said Russ Mould, investment director at AJ Bell.
‘The need for scale, fierce competition and significant costs associated with the takeaway sector means further consolidation could be on the cards.’