Deliveroo losses narrow

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  • Deliveroo posted a loss of £245.6m last year.
  • But operating losses for 2022 were still 15% less than a year ago.

Deliveroo reported a loss of £245.6m last year as order growth slowed, new results show.

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But the operating loss for 2022 was still 15% less than the £290.1m loss recorded a year earlier.

On Thursday, Deliveroo told investors that profitability had improved in the second half of the year, with earnings “significantly better than expected.”

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“Our team has been operating in challenging market conditions,” said Deliveroo CEO Will Shue.

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It comes after the company also reported a 9% rise in gross transaction value to £6.8bn as bookings slowed after restaurants and pubs reopened after the lockdown. Revenue rose 14% to £1.9bn.

Promotions Deliveroo fell today and are down 1.38% or 1.24 pence to 88.30 pence in early morning trading, down more than 24 percent last year.

The group said it took steps last year to “optimize consumer fees,” including aligning shipping fees with delivery distance and “adjusting the balance between shipping fees and service fees.”

The company has also cut costs and streamlined its logistics network, as well as making more use of “order stacking,” where a delivery driver picks up two orders at the same time.

Will Shue, Founder and CEO of Deliveroo, said: “Our team has been operating in challenging market conditions while continuing to grow and gain share in our key markets.

“I am particularly pleased that the Company achieved adjusted EBITDA margin in the second half of last year. This is an important step on our journey to sustainable cash generation, and we reached this milestone a year ahead of schedule, successfully executing our strategy despite market environment obstacles.

“The macro outlook for the coming year remains uncertain, but our results over the past 12 months make me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth.”

The group said: “Deliveroo’s average monthly active consumers (MAC) grew 6 percent year-on-year, averaging 7.4 million in 2022, up from 7 million in 2021. cents year-on-year compared to the fourth quarter of 2021, reflecting a challenging macroeconomic environment in 2022.”

The average order frequency during 2022 was 3.4 times per month. The gross value of the deal rose to £22.9, up 70p from 2021, representing an increase of 3 percent or 2 percent in constant currency.

The company’s net cash was down 23% to £996m from £1.2bn in the same period last year.

The London-listed group said it expects transaction value growth to be “low to medium single digits” this year and “broadly unchanged” in the first quarter before growth improves.

Last month, Deliveroo announced plans to cut around 350 jobs, mostly in the UK. Deliveroo said it expects the total number of laid-off workers to be “approximately 300” due to redeployment to other business areas.

“The world we work in has changed,” Shu said last month.

He added: “In recent years, we have increased our headcount very quickly. This was in response to the unprecedented pace of growth supported by tailwinds associated with Covid.

“On the contrary, we are now facing serious and unforeseen economic obstacles. Frankly, our fixed cost base is too large for our business.

The founder and CEO told workers that the cuts were “my responsibility,” reflecting that he needed to “take a more balanced approach to headcount growth.”

Chris Beauchamp, chief market analyst at IG Group, said: “Deliveroo is showing encouraging signs of a return to growth as orders recover but there is still a long way to go.

“Hopefully as inflation comes down, the firm’s task becomes easier as consumers return to food a year or more after their incomes have dwindled.”

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