Deliveroo Shares Jump After Reporting H1 Profit, Announcing Share Buyback

Deliveroo (LON: ROO) shares surged more than 6% at the open on Thursday after the company reported a positive profit and free cash flow for the first half of 2024.

This marks a significant turnaround for the food delivery giant, which previously struggled with profitability.

For the first six months to June, Deliveroo posted a £1.3 million profit, up from a loss of £82.9 million a year earlier.

The company highlighted strong execution on its strategy, resulting in key financial milestones. Gross transaction value (GTV) grew 6% year-on-year, while revenue rose 2% to £1.028 billion.

Order growth also returned to positive territory, increasing by 2%. Importantly, Deliveroo maintained a stable gross profit margin. The company also reported a positive free cash flow of £3.2 million, compared to -£27.7 million in the first half of 2023.

Additionally, Deliveroo said it saw encouraging signs in consumer behavior, with frequency of orders and retention both improving.

Deliveroo's financial strength is further bolstered by positive adjusted EBITDA of £62 million, a 57% increase year-on-year. This strong performance allowed the company to announce a new £150 million share buyback program, reflecting confidence in its future.

Looking ahead, Deliveroo maintains its GTV growth forecast of 5-9% in constant currency. The company also expects adjusted EBITDA to be in the upper half of the previously guided range of £110-130 million and anticipates positive free cash flow for the full year.

“I am pleased with the performance we have achieved this half,” said Will Shu, Founder and CEO of Deliveroo. “We reached two major financial milestones: positive free cash flow and positive profit for the period.”