(Alliance News) - Deliveroo PLC said on Wednesday it is ending its operations in Australia after deciding it could not reach a sustainable and profitable scale without "considerable financial investment".
The London-based delivery services firm said the decision was driven by its "disciplined approach to capital allocation", saying the expected return on the required investment was "not commensurate with Deliveroo's risk/reward thresholds".
The company said the Australian market was highly competitive, with four global businesses already operating there. Deliveroo found it did not hold a broad base of strong local positions.
Its subsidiary Deliveroo Australia Pty Ltd has been placed into voluntary administration and will permanently cease trading imminently.
"This was a difficult decision and not one we have taken lightly," said Chief Operating Officer Eric French.
In the first half of 2022, Deliveroo Australia represented 3% of Deliveroo's gross transaction value.
A deed of company arrangement will be forwarded to the administrators detailing compensation packages to creditors.
Shares in Deliveroo fell by 3.5% to 96.12 pence in London on Wednesday morning.
By Greg Rosenvinge; gregrosenvinge@alliancenews.com
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Deliveroo (ROO)