Deliveroo has reported its first half-year profit, as the UK food delivery company hailed early signs of a rebound in consumer spending amid a further push into grocery and retail deliveries.
The company swung to a profit of £1m in the first six months of the year, its first since the business was launched in 2013, having reported an £83m loss in the same period a year earlier.
Its earnings report said there were “encouraging early signs in consumer behaviour”, noting a “positive inflection” in most markets, with the number of purchases by returning customers improving over the period. The overall value of sales and delivery fees across the business rose by 6% globally, and 7% in the UK and Ireland, in the first half of 2024.
That included strong growth in its grocery business, and a continued push into retail deliveries, where Deliveroo said it was seeing positive early progress. It expanded partnerships with major brands in the UK and UAE, including Holland & Barrett, B&Q and Toys R Us, as it prioritised a push into areas such as toys, flowers, and homeware, which it said was based on consumer demand.
The news pushed Deliveroo’s shares up by 8.6% in morning trading on Wednesday, to 138.8p.
Founder and chief executive, Will Shu, said: “I am pleased with the performance we have achieved this half, which was driven by effective execution of our growth and profitability initiatives. As a result, we reached two major financial milestones: positive free cashflow and positive profit for the period.”
Bosses have been trying to diversify the business to boost sales, having struggled to rebound after the easing of during pandemic lockdowns. Delivery apps including Deliveroo thrived during the Covid outbreak, as people increased their spending on takeaways while they were stuck at home and with restaurants closed.
Surging inflation has also forced consumers to rein in spending over the past two years, pushing Deliveroo to cut 350 roles earlier this year to make up for the drop in online orders.
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“Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets,” Shu said.
“The Deliveroo platform is more powerful than ever, and we remain responsive to the external environment while continuing to optimise our proposition for consumers, riders and merchants.”