London (AFP) – Deliveroo shares surged more than ten percent Thursday after the international food delivery app struck its first six-month net profit, an achievement described as a “major milestone” by its boss. Profit after tax stood at £1.3 million ($1.6 million) in the first half, which compared with a net loss totalling £83 million in the January-June period last year, as the British company continued to cut costs and as revenue edged higher.
“I am pleased with the performance we have achieved this half,” chief executive Will Shu said in an earnings statement, 11 years after establishing the group. Deliveroo, which experienced surging demand during the Covid pandemic from lockdown-hit customers, has tens of thousands of self-employed riders — a status that continues to cause controversy. Late last year, the UK Supreme Court ruled that Deliveroo riders were not entitled to trade union rights such as collective bargaining.
The company has faced also questions over its sustainability, highlighted by its failed stock market debut in 2021. Its initial public offering had been London’s biggest stock market launch for a decade, valuing the group at £7.6 billion. But its share price tumbled on launch day by almost one third from the IPO price of £3.90 as investors questioned Deliveroo’s treatment of its self-employed riders.
Following Thursday’s update, its share price rallied 10 percent to slightly above £1.40.
© 2024 AFP
