Food delivery app Deliveroo significantly cut losses in the first half of the year and said it is considering paying its first dividend to shareholders as it closes in on profitability.
The London-listed company said losses stood at £83m, down from £153m a year ago. Deliveroo added that it achieved profitability “ahead of expectations” using an adjusted EBITDA metric.
“Given we’re well ahead we’re confidently saying we’re going to propose a return to shareholders,” said Will Shu, founder and CEO of Deliveroo.
The British tech company, which debuted on the London Stock Exchange in 2021 in a lacklustre IPO, said it was exploring ways to return an additional £250m of “structural surplus capital” to shareholders.
Shu said this could be via a special dividend, share buyback or tender offer.
Revenues increased by 5% during the period, from £973m to £1.02bn. However, orders were down 6%, amid what Shu described as “challenging macroeconomic conditions”.
Gross transaction value per order increased by 10%, making up for the drop in order volume. Adjusted earnings before interest, tax, depreciation and amortisation stood at £39m for the period.
UK and Ireland growth outperformed international markets. Shares in Deliveroo rose by as much as 3.6% this morning as the company upgraded its 2023 adjusted EBITDA guidance to £60-£80m, up from £20m-£50m.
“The industry is large and still early in its maturity, and we are excited by the growth opportunities ahead of us – whether this is daily incremental improvements to the consumer value proposition, or expanding in verticals such as grocery and non-food retail,” said Shu, who founded Deliveroo alongside Greg Orlowski in 2013.
In February this year, Deliveroo cut 350 jobs amid a wave of broader tech sector layoffs.