Deliveroo sees 88% jump in second-quarter orders

Sales in UK and Ireland particularly strong, growing 94% to 38m

A takeaway food courier, working for Deliveroo, operated by Roofoods Ltd., stops in the Chinatown district of London, U.K., on Tuesday, Sept. 29, 2020. Covid-19 lockdown enabled online and app-based grocery delivery service providers to make inroads with customers they had previously struggled to recruit, according the Consumer Radar report by BloombergNEF. Photographer: Hollie Adams/Bloomberg via Getty Images

Deliveroo’s orders rose sharply in the second quarter of 2021, up 88 per cent from the same period a year earlier to 78 million, the food delivery company said on Friday, just three months after it listed on the London Stock Exchange.

Orders in the UK and Ireland were particularly strong, growing 94 per cent to 38 million in the three months to the end of June, while the group's international segment grew 83 per cent to 40 million over the same period.

The gross transaction value (GTV), the amount spent by customers apart from tips, was also strong in the UK and Ireland in the second quarter, up 87 per cent to £921 million ($1.27 billion), compared with 65 per cent growth in its operations in the rest of the world, to £818m.

Meanwhile, GTV for the first half of the year hit £3.4 billion – up 99 per cent from the same period in 2020.

“Deliveroo has seen continued strong growth and consumer engagement in H1, and as a result of that plus increased expectations for H2 it is increasing the guidance for full-year annual GTV growth from between 30 per cent and 40 per cent to between 50 per cent and 60 per cent,” the company said.

Deliveroo's debut on the London Stock Exchange on March 31 was called disastrous after the share price plunged 30 per cent on its first day of trading, wiping more than £2bn from Deliveroo’s £7.59bn valuation.

Its share price was up more than 4 per cent on Thursday at 8.54am London time, at £3.43, as investors responded positively to the upbeat sales figures.

Deliveroo said it sees an opportunity to invest more in growth opportunities in the second half of the year, without elaborating further. The higher spending, along with the expectation that average order values would return to pre-pandemic levels, would weigh on profit margins, it said.

The company held its annual gross margins forecast of 7.5 per cent to 8 per cent, but said margins would likely come in at the lower end of that range.

Earlier this week the company said it would hire 400 software engineers, data scientists and designers over the next 12 months to drive innovation on its platform.

The company said the expansion would enable it to develop its logistics technology to help restaurants, delivery workers and customers.

Elsewhere, shares of financial technology company Wise ended 10 per cent up on their first day of trading on Wednesday in London's largest ever tech listing.

The British government has been keen to attract technology groups to list in the country and its financial watchdog earlier this week outlined proposals to make it easier for them to list, to help London compete with New York and the EU post-Brexit.

Wire shares opened at £8 and closed at £8.80 pence, valuing the company at £8.75bn and making it London's biggest tech company by market capitalisation, well above $6-$7bn market expectations from earlier this year. The share price dipped slightly in early trading on Thursday, down 1.15 per cent to £8.69 at 9.04am London time.

However, the strong opening crowns a record-breaking year for London listings and could encourage other fast-growing companies in the financial technology sector to list in UK capital.

Updated: July 8th 2021, 9:37 AM
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