Relationships with retailers such as B&Q, Screwfix and Ann Summers have helped Deliveroo raise its profit forecasts, after the food delivery group recorded a strong rise in orders.
The FTSE 250 company, which debuted on the London Stock Exchange in 2021, told shareholders that adjusted underlying profits for the year to December 31 were likely to come in at the high end of its guidance of £110 million to £130 million.
Will Shaw, founder and chief executive of Deliveroo, said “strong growth in grocery stores” and an expanding product range had enabled the company to “bring more of the region to consumers’ doors”. Over the past year, the company has partnered with several well-known retail names including The Perfume Shop and Not On The High Street.
Deliveroo said the total number of orders rose by 3 per cent to 77.5 million during the final quarter of last year, with the UK and Ireland contributing 43.1 million of these orders – an increase of 5 per cent on the same period the previous year.
Overseas markets have proven to be more mixed. While the UAE and Italy saw continued growth, France showed “some continued weakness in the market” and Hong Kong remained “difficult” due to strong competition from Chinese rival Meituan, which entered the market in May 2023.
Panmure Liberum analyst Sean Kelly noted that Deliveroo may consider pulling out of Hong Kong given the difficult environment there.
Deliveroo’s gross transaction value (GTV) – the total cost of all food orders plus delivery fees – rose 7 per cent to £1.97bn in the three months to December. Quarterly revenue, which does not include payments to restaurants and passengers, rose 6 per cent to £545 million.
For the full year last year, revenue was £2.07 billion, up 3 per cent, while total GTV rose 6 per cent 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 employs around 140,000 riders. Shaw, who used to deliver pizzas himself, maintains a 6.1 per cent stake in the company, while Amazon is the largest shareholder, with 13.7 per cent.
Although Deliveroo’s 2021 IPO was viewed by some as a disappointment – with its shares falling by almost a third on its debut – an upbeat trading update on Thursday lifted the stock 6.6 per cent, closing at 138p.