(Alliance News) - Deliveroo PLC on Wednesday reported slower revenue growth and a wider pretax loss, amid a weaker consumer market, and the food delivery firm announced the departure of Simon Wolfson from its board.
Wolfson is chief executive officer of Next PLC and currently the longest serving FTSE 100 CEO. "After much consideration, and with regret, I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments," he said.
"I have enjoyed my time working with [Founder & CEO Will Shu], the executive team and my board colleagues over the past 18 months and wish the company all the best for the future."
Wolfson departed already on Tuesday.
For the six months ending June 30, London-based Deliveroo reported a 12% increase in revenue to GBP1.03 billion from GBP907.0 million a year before, due to growth in consumer fees, commission revenue and contribution from advertising. The company also saw a 10% increase in orders for the first half of the year. However, in 2021, revenue jumped by 57% from 2020.
Pretax loss widened to GBP147.3 million from GBP95.4 million a year prior, though adjusted earnings before interest, tax, depreciation and amortisation narrowed to GBP68 million from GBP106 million.
Deliveroo said a weaker consumer environment was reflected in the growth in gross transaction value, which slowed substantially to 2% for the second quarter from 12% in the first quarter. Post-Covid consumer behaviour and inflationary pressure has caused consumers to be more careful with their spending, it said.
Additionally, administrative expenses increased 28% to GBP452.5 million from GBP351.2 million the previous year, making it Deliveroo's largest expense.
No interim dividend was declared, and Deliveroo said it "does not expect to declare or pay any dividends for the foreseeable future".
Looking ahead, Deliveroo has adjusted its guidance to reflect the uncertainty in the economic environment. It now expects growth in gross transaction value for the full year to be in the range of 4% to 12%. The company said it will implement tighter cost control measures and be more efficient with marketing expenditure.
It expects an adjusted Ebitda margin of negative 1.5% to 1.8% in all of 2022. The company still expects to reach breakeven on adjusted earnings sometime between the second half of next year and the first half of 2024.
Deliveroo has expanded its grocery offering as well as its non-food offering, which includes WH Smith PLC and LloydsPharmacy.
CEO Shu said: "So far in 2022, we have made good progress delivering on our profitability plan, despite increased consumer headwinds and slowing growth during the period. We are confident that in [the second half of the year] and beyond we will see further gains from actions already taken, as well as benefits from new initiatives."
Shares in Deliveroo were up 4.2% at 95.08 pence in London on Wednesday.
By Dominique Pretorius; dominiquepretorius@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
Deliveroo (ROO)
Next (NXT)
Wh Smith (SMWH)
