Deliveroo losses rise to £147m as cost of living crisis rages | Deliveroo

Deliveroo’s losses more than halved to £147million in the first six months of the year as the struggling business faced a dramatic slowdown in revenue growth, the cost crisis of life affecting takeout demand.

The London-listed company also announced that Simon Wolfson, chief executive of clothing retailer Next, is to step down from the board with immediate effect.

Wolfson, who joined the board 18 months ago for his first outside directorship in three decades, said the role was “no longer compatible” with his executive and other commitments.

Deliveroo said revenue rose 12% year-on-year to £1.01bn in the first six months, but pre-tax losses rose 54% due to soaring delivery costs and staff – especially those in technology roles.

Its figures also showed the rapid impact of the cost of living crisis, with revenue growth slowing dramatically from 12% in the first quarter to just 2% in the three months to the end of June, as that consumers were looking to cut back on non-essential spending. spending as household bills soared.

“We made good progress in delivering on our profitability plan despite increasing consumer headwinds and slowing growth over the period,” said Will Shu, chief executive and co-founder of Deliveroo, who has not made a profit since its inception in 2013. “We remain confident in our ability to adapt financially to any new developments in the macroeconomic environment.

The company, which announced it would close its operations in the Netherlands, reported a 10% increase in year-on-year shipments to 160 million in the first six months, while monthly active customers increased increased by 4% to 7.8 million.

However, gross transaction value per order — the amount customers spent on average on a takeout — fell 4%, which the company said was due to consumers spending more during lockdowns. Last year.

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The company, which pulled out of Spain last year and Germany in 2019, beat analysts’ expectations, with investors pushing its share price up nearly 4%.

However, the earnings release follows a downward revision released last month for total GTV growth for the year of 4% to 12% – compared to a previous forecast of between 15% and 25%.

“Growth slowed in the last quarter and the main reason it managed to beat estimates was because of reduced marketing spend,” said Danni Hewson, financial analyst at AJ Bell.

The share price of Deliveroo, which had a disastrous IPO in London in March 2021 that prompted city watchers to dub the company “Flopperoo”, has fallen by three-quarters in the past year.

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