UK food delivery company Deliveroo has downgraded its full-year growth forecast due to the impact of inflation, which will see consumers spend less on non-essential items such as takeaways .
Shares in the company, which have lost more than three-quarters of their value since its IPO in March 2021 at 390 pence (and 60% since the start of this year), fell 3% to 82.4 pence on early hours of this Monday, but now they are up around 6% to 90 pence.
The group, which competes with Just Eat Takeaway and Uber Eats among others, explained that gross operating value (GTV) growth for the full fiscal year 2022 will be in a range between 4% and 12%, compared to the previous range of between 15% and 25%, without taking into account the impact of the exchange rate.
Deliveroo, which operates in 11 markets around the world with 190,000 drivers, said it faced “a more cautious outlook” after its financial results for the same quarter of 2021 were boosted by an increase in food orders at process due to pandemic-related lockdowns.
However, the company, which left Spain last November, coinciding with the approval of the riders law, confirmed its adjusted gross operating margin (Ebitda) guidance for 2022 in a range of -1.5% to -1.8% of GTV, compared to -2% for the 2021 financial year and -3.2% for the second half of 2021.
Over the first six months of the year, the platform recorded year-on-year growth of 7% in GTV, to 3,560 million pounds sterling (4,187 million euros). However, in the second quarter, growth was limited to 2% against 12% observed over the first three months of the year, failing to meet analysts’ expectations.
Specifically, in the second quarter, Deliveroo’s GTV growth in the UK and Ireland slowed to 4% from 12% in the first quarter, while internationally it was 1% from 11% in the first trimester. And it is that due to inflation, citizens reduce their purchases.
In this sense, he added that in the second quarter of 2022, the growth of orders was 3% year on year, while the GTV per order decreased slightly compared to the previous year, when order sizes increased. during the closings still in effect for part of the second quarter of 2021.
According to the company, this reflects “the impact of increased consumer headwinds” over the past quarter. GTV’s growth was 70% in 2021, when Covid-19 shutdowns boosted demand. But, as the Financial Times reports, the average cost of a takeout meal has risen an average of 8% since the start of the year, according to Takeanalytics, a research team that tracks food delivery apps.
Jefferies analysts said the forecast implied a full-year loss of 118 million pounds (about 140 million euros). “Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more effective marketing spend and tight cost control,” Deliveroo added. . Last March, the company said it would break even in about two years.
Deliveroo’s warning is the latest evidence that food delivery platforms are struggling to regain growth after profiting from the pandemic. Its rival Just Eat Takeaway has lost more than half its stock market value since January.