London-based food delivery group Deliveroo has largely dodged the global easing of lockdown measures, recording sales for the first half of the year up 82%, with six-month pretax losses down by a fifth.
Investors had been unsure about Deliveroo’s growth prospects once COVID-19 restrictions fell, and diners could once again freely book a table at a restaurant, or just get out of the house and go somewhere.
Revenue for the Amazon-backed group the first half of the year was £922.5 million ($1.27 billion), and orders had doubled from the year-ago period, delivering 148.8 million meals and groceries.
Shares in the group were down 4.4% this morning, cooling off from yesterday’s 12% gain after it came out that German rival Delivery Hero had built a 5% stake in the British company. Despite the selloff, Deliveroo is inching closer to recuperating from its March initial public offering, which saw shares plunge as much as 31% in the first few minutes of trading, dropping off from its initial price of 390 pence.
The food delivery service noted that it had benefited from pandemic lockdowns and saw very little impact in countries lifting restrictions as COVID case data improved.
“Widened our consumer base”
Will Shu, founder and CEO of Deliveroo, said the company was seeing strong growth across the dozen markets in which it operates. “Demand has been high amongst consumers,” he said. “We have widened our consumer base, seen people continuing to order frequently.”
Monthly active consumers—a key metric—increased by 81% year on year to 7.8 million people. Gross transaction value in its largest market rose 110%, from the first half of last year, and gross profit margin improved by 100 basis points to 7.8%.
In the U.K., Deliveroo is pushing further into rural communities, now reaching 72% of the population—ahead of the 67% target it set itself last year—and is also working with more food merchants than any other platform in the country.
Meanwhile, the big buzz is around its stock. The recent rally in Deliveroo shares is good news for German rival Delivery Hero—which owns Just Eat Takeaway—as it began to stock up on its competitor’s shares shortly after Deliveroo’s underwhelming market debut in March. At a time of consolidation in the online food industry, Delivery Hero is hoping to gain a further stake in the surging U.K. Home-delivery market.
Niklas Östberg, Delivery Hero’s chief executive, noted in a tweet thread the company began building its stake in April after considering “all possible scenarios.” He added that he had “huge respect” for Deliveroo founder Will Shu and his team and the company’s stock “felt undervalued.”
He added that the firm was not buying any more shares at this point.