Deliveroo sees revenue at lower end of guidance

Food delivery platform Deliveroo on Friday said it expected annual revenue to be at the lower end of guidance as consumers tightened their belts.

It said full-year gross transaction value (GTV) growth – a key measure - was now expected to be 4-8% on a constant currency basis, the lower part of the previously announced 4-12% range.

Deliveroo also upgraded its adjusted core earnings margin guidance slightly, helped by lower marketing spend.

Third quarter GTV contracted by 5% quarter on quarter in constant currency, and orders were down 7%, reflecting summer seasonality in European markets and current consumer headwinds, the company said.

GTV per order has increased quarter-by-quarter since Q3 2021 to reach £23.4 in Q3 2022, primarily driven by item price inflation.

Deliveroo’s UK & Ireland business outperformed its international operations with 11% growth year-on-year. The company said it has benefited from its continued expansion which saw the rollout of more than 1,000 McDonald’s sites to its service in the UK, as well as the expansion of its partnership with Boots to 125 stores.

“During the quarter we delivered continued gross transaction value growth year-on-year, strengthened our value proposition and made further progress on our path to profitability," said Will Shu, founder and chief executive.

“Since June, the year-on-year growth trend has been broadly stable, despite the ongoing economic uncertainty. Throughout 2022 we have been adapting financially to the operating environment and driving forward on our path to profitability, and we now expect the H2 2022 adjusted earnings margin to be better than our previous guidance."

Reporting by Frank Prenesti for Sharecast.com