Deliveroo sank to a loss in the first half as its looming takeover by US rival DoorDash weighed, but orders and sales surged as households ordered more takeaways.
The company’s gross transaction value, an industry metric including delivery costs for the total value of transactions on platforms, came in at £3.8billion for the first six months of the year.
Globally, the total number of orders reached 147million by the end of the period, which is 8 per cent higher than a year ago.
Average order frequency rose across all the group’s geographical markets year-on-year, with customers often returning to use the food delivery platform multiple times in the period.
Revenue grew 8 per cent to £1billion, but the group still swung to a loss in the period as it edged closer to its planned takeover by US rival DoorDash.
Flagging costs relating to the costs, the company unveiled a half-year loss of £19.2million for the period, against a £1.3million profit a year ago.
Loss: Deliveroo sank to a loss in the first half despite seeing a surge in orders
The company attributed its loss predominantly to ‘advisory and legal fees in relation to the DoorDash acquisition’, without which it would have made a net profit.
Its adjusted EBITDA jumped 46 per cent to £96million in the period.
Deliveroo agreed to be bought by the rival US delivery firm in May in a deal worth around £2.9 billion.
The Silicon Valley-based group, which is the largest food delivery platform in the US, said it would pay 180p per share in cash for Deliveroo.
DoorDash said the takeover would expand its geographic presence to nine new markets, including Britain, meaning it will have operations in over 40 countries.
Will Shu, founder and chief executive of Deliveroo, said: ‘The first half of this year was very positive.
‘Our long term focus on improving the CVP is paying off. Consumer engagement is encouraging, with order frequency and retention continuing to improve across all cohorts.
‘Today, both growth and profitability are accelerating. We are delivering on our mission to change the way people shop and eat and to bring the neighbourhood to people’s doors. I’m proud of where we are and all that we have achieved. We helped to build an entire sector and have redefined it multiple times over.’
He added: ‘I’m excited for what the partnership with Doordash can bring in the future. They will be an excellent partner for everyone at the company, as well as for our consumers, merchant partners and riders.’
The London-listed company, which in May agreed the takeover by DoorDash, said the deal was proceeding in line with the expected timeline, with closing projected in the fourth quarter of this year.
The group forecast an annual core profit of £170million to £190million, the upper end of its previous forecast range.
Adam Vettese, an analyst for eToro, said: ‘Deliveroo is showing once again that online food delivery is here to stay.
‘Its latest update demonstrates a decisive step forward both operationally and strategically.
‘The company has reignited top line momentum, with orders and revenue around 9 per cent higher year on year with an acceleration visible into the second quarter.’
‘The growth is not just restricted to its core UK and Ireland region, international markets like the UAE and Italy are thriving, and the business is driving expansion in grocery, retail, and advertising.
‘Underpinning those gains are tangible improvements in consumer engagement and value proposition with order frequency and retention up as a result.
‘While headline profitability was affected by exceptional costs linked to the pending DoorDash acquisition, on an underlying basis Deliveroo delivered a substantial 46 per cent gain in adjusted EBITDA. Moreover, the company lifted profit forecasts to the upper end of previous guidance.’
Deliveroo shares remained flat on Thursday, having risen nearly 40 per cent in the last year.
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