Deliveroo is 50 per cent down on its offer price — can its first capital markets day turn the tide?
Deliveroo will host its first capital markets day with investors keen to see if chief Will Shu’s plans to allow shoppers to buy makeup and toys on its delivery app will be enough to turn the tide on its weak share price.
The founder will address the London market later today, three years after the app floated on the market.
The group’s disastrous £8bn listing in March 2021, saw shares plunge 60 per cent last year — they have struggled to recover since.
Deliveroo is now 50 per cent down on its offer price after a return to dining out and Brits clamping down on takeaways knocked the firm off its perch.
But in recent months, Deliveroo has regained some momentum, revealing in the third quarter update, that revenues in its UK and Ireland arm grew by a steady three per cent to £297m, but internationally it fell by seven per cent.
This morning, Shu backed the group’s guidance for the year of £60-80m and said the firm remains “relentlessly focused” on improving the delivery experience and providing value for money to consumers.
He said: “I’m pleased to be hosting Deliveroo’s first capital markets event today. It has been 11 years since Deliveroo was founded and almost three years since our IPO. I am excited as ever about the future of the business – there continues to be significant headroom for growth.
“We remain relentlessly focused on improving the delivery experience and providing value for money to consumers. I believe that this is critical to unlocking the full growth potential in our industry and I am exceptionally proud of the work our team has done in this area already.”
As Brits tighten the belt on takeaways, the firm has announced a new shopping section of the app, enabling consumers to shop from categories such as toys, DIY, electronics and beauty.
It will also roll out a partnership with home improvement retailer Screwfix, with an initial range of up to 500 home improvement products soon to be available on the app.
It comes after the group previously partnered with the likes of Sainsbury’s to allow last-minute shoppers to get groceries on the app.
At the event, Deliveroo’s financial framework will also be discussed, but the group said it does not intend to provide an update on its current trading.
To drive growth, analysts at Panmure Gordon said they would like to see Deliveroo open its logistics sites to third-party groups.
Sean Kealy, analyst at the firm, said: “We note that Uber has launched Uber Direct, a service which allows retailers to plug their delivery needs into the last-mile logistics network of Uber. We are aware of private companies operating a similar value proposition.”
“Given Deliveroo’s dominance of the London food delivery market, we expect it would be able to provide cheaper delivery economics than competitors. Thus, we would welcome any move to provide fulfilment to retailers not well suited to its marketplace operation.”
Kealy also said that Deliveroo upping its multi-site stacking — when a rider collects two orders from different restaurants and/or grocery partners — would also bode well with investors as it would reduce rider cost per order.
He added: “From the rider FAQ section of the website, we believe Deliveroo may have introduced this in recent weeks.
“This would be a significant step forward in managing the delivery network, in our view. Multi-site stacking allows riders to perform a significantly more efficient route of multiple non-sequential pickups and drop-offs.”
Deliveroo’s share price was up two per cent this morning when markets opened.