London (AFP) – Food delivery app Deliveroo announced Thursday its first annual profit as orders and revenue rose, while the 12-year-old company sees further growth despite exiting Hong Kong. The milestone follows sizeable full-year losses owing to high investment costs since American Will Shu founded the company in 2013 and made Deliveroo’s first delivery in London.
Deliveroo, which earlier this week said it was exiting Hong Kong owing to growing competition in the Chinese city, posted profit after tax of £2.9 million ($3.8 million) last year following a loss of £31.8 million in 2023. Revenue grew two percent to nearly £2.1 billion, while orders also grew two percent, according to an earnings statement. “Whilst the consumer environment remains uncertain, I am confident that we can continue to deliver growth,” Shu said in the release.
Going forward, Deliveroo said its focus would include “supporting restaurant partners to meet untapped consumer demand around new occasions,” while expanding grocery and retail offerings. Deliveroo is present in the UK and Ireland, Belgium, France, Italy, Kuwait, Qatar, Singapore, and the United Arab Emirates. However, in recent years it has exited Australia and the Netherlands due to competition. It also left Spain after it became the first European Union nation to give food delivery riders labor rights, requiring that they be recognized as employees instead of being considered self-employed freelancers.
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. In late 2023, the UK Supreme Court ruled that Deliveroo riders were not entitled to trade union rights such as collective bargaining. The company has faced questions also 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. Despite the profit milestone, its share price slid 4.7 percent to £1.19 in early London deals.
“It’s been a long hard slog but Deliveroo has finally climbed the tough summit of reaching annual profitability,” noted Susannah Streeter, head of money and markets at Hargreaves Lansdown. “But it’s not going to be freewheeling from here and the uncertain economic environment points to a wobbly ride ahead.”
© 2024 AFP
