Takeaway delivery firm Deliveroo has posted a £245.6 million loss for the past year as people seemingly cut back on takeaways during the cost of living squeeze.. However, the operating loss for 2022 was still 15% smaller than the £290.1 million loss it recorded a year earlier.
Deliveroo also told investors on Thursday morning that profitability improved during the second half of the year, with earnings “significantly ahead of expectations”. It forecast underlying earnings growth of between £20 million and £50 million over 2023 as it continues to rein in costs to weather the tougher trading. It came as the company also revealed a 9% rise in gross transaction value to £6.8 billion – far less than its previous guidance – as orders slowed following the reopening of restaurants and pubs after lockdowns.
Will Shu, founder and chief executive officer, said: “I’m proud of our performance in the past 12 months. Our team has delivered in difficult market conditions, with continued growth and share gains in our key markets. The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth.”
The London-listed group said transaction value growth is expected be in the “low to mid-single digits” during 2023, with a “broadly flat” first quarter before growth improves. Last month, the business revealed plans to cut about 350 roles, predominantly affecting UK-based employees.
Shares in the group fell 3% in morning trading on Thursday. The figures come as takeaway delivery firms are seeing a sharp slowdown in orders, with demand hit amid a wider pullback in consumer spending amid the cost crisis, with growth also easing after a pandemic-driven boom during 2020 and 2021.
In the UK and Ireland, Deliveroo saw GTV lift 9% over the final quarter of 2022 and 9% over the full year to £3.9 billion. This marked a significant outperformance against its international operations, excluding Australia and the Netherlands, which saw order numbers fall 5% and GTV edge 2% higher in the fourth quarter – up 3% and 5% respectively over the year. Deliveroo announced last November it was pulling out of Australia because it would take “considerable” investment to reach a profitable scale.
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Russ Mould, investment director at AJ Bell, said: “There are two big problems looming over Deliveroo. Households with less money in their pocket are unlikely to casually order in food on a regular basis and, as we have emerged from the pandemic, there are competing demands for any disposable cash they do have. Undoubtedly there will still be an appetite for ordering food through an easy-to-use platform but fierce competition in a market which also features big names like Just Eat and Uber Eats makes turning a profit hard.”
