Daily Management Review

Deliveroo Touts Its Doubling In Orders In Q1 Aimed At IPO Redemption


Deliveroo Touts Its Doubling In Orders In Q1 Aimed At IPO Redemption
The British food delivery firm Deliveroo cited the more than doubling of its orders during the first quarter when the Covid-19 lockdowns was in force was the initial step for proving itself after the debacle that it encountered during its last month’s public listing in London.
“We have a lot of work ahead of us to both grow the business over the long term, and prove ourselves to the markets,” Chief Executive Will Shu said. “It is day one of doing that.”
The company said that its growth increased for the fourth consecutive quarter with a 114 per cent year on year jump in its groups orders to 71 million and a 130 per cent year on year growth in gross transaction value (GTV) to reach 1.65 billion pounds ($2.27 billion).
However it was difficult to identify how much of the demand was because of closures of cafes and restaurants during the Covid-19 lockdowns. The company said that with the easing of restrictions, it expected its growth to slow down.
“We are mindful of the uncertain impact of the lifting of COVID-19 restrictions,” Shu said in an interview. “We wanted to be prudent when it comes to guidance.”
There was however indications of what could happen in other countries based on the strong demand in markets such as Hong Kong and the United Arab Emirates, he said.
The company also maintained guidance for full-year GTV growth of between 30 and 40 per cent and gross profit margins of between 7.5 and 8.0 per cent.
During the first quarter, Britain has been a “standout” market, said Deliveroo’s rival Just Eat Takeaway.com on Wednesday and added that its strong business was getting stronger then those of its competitors primarily Deliveroo and Uber Eats.
Deliveroo was “incredibly proud” of its performance in Britain and Ireland, Shu, however, said. “We feel great about our market position,” he said.
He added that there was good pace of expansion in its grocery delivery which it is carrying out in partnership with supermarkets Waitrose, Aldi, Coop, Morrisons and Sainsbury’s. He noted that GTV growth was more than 700 per cent which represented more than 10 per cent of the UK GTV.
The public listing of Deliveroo was touted to be the debut of the decade for the London Stock Exchange. However the stock prices dropped by more than 30 per cent on the first day of trading which shaved off more than 2 billion pounds from the initial 7.6 billion pound valuation of the company.
As of Thursday, the company’s shares were lower by 2 per cent which was 31 per cent lower than the IPO price of the stock.  
Because of their concerns about gig-economy working conditions, the IPO was shunned by some of Britain’s biggest investment companies.
Courts in Britain, France and Italy had upheld the self-employed rider model of the company, Shu said. “I’m not wedded to any particular model,” he said. “However I am wedded to the model that riders want.”