British meal delivery company Deliveroo said it had achieved the twin milestones of profit and free cash flow in the six months to end-June as demand from customers stabilised.
It reported profit of £1.3 million (€1.51 million), compared to a loss of £83 million (€96.28 million) a year ago, and free cash flow of £3.2 million (€3.71 million), up from a negative cash flow of £27.7 million (€32.13 million).
The company said that it reported growth across key metrics, including a 6% increase in gross transaction value (GTV) and a 2% rise in revenue at constant currency, with orders returning to growth of 2%. This was achieved alongside a stable gross profit margin.
There was also notable GTV growth in both its UK & Ireland and International markets, with constant currency GTV growth of 7% in UK & Ireland and 5% in International.
‘Effective Execution’
“I am pleased with the performance we have achieved this half, which was driven by effective execution of our growth and profitability initiatives,” commented Will Shu, chief executive. “As a result, we reached two major financial milestones: positive free cash flow and positive profit for the period.
“Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets. The Deliveroo platform is more powerful than ever, and we remain responsive to the external environment while continuing to optimise our proposition for consumers, riders and merchants. We operate across attractive verticals, in large, underpenetrated markets, and it’s clear that there is a lot of room for growth in our industry.”
Analyst Viewpoint
Commenting on Deliveroo’s performance, Sean Kelly at Liberum commented, “Deliveroo’s H1 results present a strong performance from the company. GTV growth has been in-line with consensus and peers, but UKI order growth remained +ve ahead of Jus- Eat Takeaway in the quarter. A strong EBITDA beat of +12% on CC cons and growing contributions from advertising and grocery have supported FCF of £3m in the half, with the underlying run-rate now exceeding £100m p.a.
“Following the c£150m share buyback announced with these results, that pillar of our investment case has materialised.”
Additional reporting by ESM
