Deliveroo: Push into retail and groceries drives growth
Deliveroo has said its retail and grocery partnerships drove growth in the last quarter of the year despite a still-tough trading environment.
Its share price rose nearly five per cent in early trades.
The delivery company launched its on-demand grocery service in March 2020, and has since partnered with a range of brands, with companies from Waitrose to Not On The High Street and B&Q all available to purchase from on the app.
Deliveroo booked revenue growth of six per cent in the fourth quarter of the year, in-line with guidance of five to nine per cent.
It forecast adjusted earnings before interest, tax, depreciation and amortization (EBITDA) at the top end of the £110-130m range.
Revenue growth in the UK & Ireland improved to nine per cent, with order growth accelerating to five per cent, far ahead of one per cent growth in the second quarter and two per cent growth in the third quarter.
Excluding Hong Kong, international revenue growth was 10 per cent in constant currency, while orders grew six per cent year on year, Deliveroo said, with Hong Kong “impacted by the difficult competitive environment”.
The results are a positive sign for a company which was treading water in a tough consumer environment last year.
While Deliveroo noted that the trading environment was “still uncertain”, it implemented a number of successful initiatives last year aimed to “drive improvements to frequency and retention”.
Chief executive Will Shu said: “I’m proud of our progress in 2024 as we continued to strengthen our consumer value proposition. We enhanced our loyalty programmes, delivered strong growth in grocery and secured new partnerships to expand our retail selection, enabling us to bring even more of the neighbourhood to consumers’ doors.
“Our continued execution has driven improved frequency and retention in [the fourth quarter], with order growth improving throughout the year in UK & Ireland.
“Our execution has also continued to deliver profitable growth, with EBITDA expected to be towards the top end of our guided range. We see many exciting opportunities ahead with significant growth potential for Deliveroo.”
Deliveroo’s share price has risen 2.5 per cent in the past six months, but has fallen more than six per cent month on month after a December rally.