Deliveroo share price down by over 4% during morning session
During H1 2021 Deliveroo (LON:ROO) doubled its orders despite the easing of coronavirus restrictions.
The London-listed food delivery firm confirmed orders of 149.9m during the six months to the end of June, compared to 75.4m over the same time period a year ago.
Deliveroo’s revenues soared to £922.5m, an increase of 82%.
As a result, the food delivery company narrowed its losses. Deliveroo confirmed a pre-tax loss of £104.8m during H1, compared to a loss of £128.4m for the first half of last year.
“The growth momentum in the second quarter is still really strong,” said Will Shu, chief executive and co-founder of Deliveroo.
“Our lockdown love affair with takeaways shows little sign of cooling just yet, with Deliveroo bringing home resilient sales even when restaurants have opened back up,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
“Deliveroo appears to be dominating the takeaway scene in many towns and cities where its distinctive mint green jacketed riders operate, despite Uber Eats and Just Eat rivals breathing down their neck. But investors appeared to have lost a little appetite for shares in early trading, with the company expecting customer behaviour to moderate later in the year,” Streeter added.
But Deliveroo’s business model has been given a vote of confidence after its Berlin based rival Delivery Hero snapped up a £300m stake this week, pushing up shares to the highest level since the company’s stock market flop.
“One of Deliveroo’s strengths is that it offers higher quality restaurant options than some rivals, which, coupled with its personalised app content and hyper-localised delivery approach, could be a major draw.”
However, the Deliveroo is down on Wednesday morning by 4.21%, despite the positive results.
Last month Deliveroo confirmed plans to cease its services in Spain because of the high costs involved in operating in the country.
“The pandemic has clearly offered a structural growth opportunity for Deliveroo”, said Streeter, “but the longer-term outlook depends on how demand holds up in a post-pandemic world, and if that road to profitability looks any clearer.”
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