Deliveroo has reached a “major milestone” by achieving its first ever profit.
The delivery platform earned £1.3m in the first half of 2024 – a sharp turnaround from the £82.9m loss it made during the same period last year.
Results published on Thursday also revealed total orders grew by 2% to 147 million. The firm achieved a cash flow of £3m and also announced a £150m share buyback programme.
Gross transaction value (GTV) per order – the average cost of a customer’s basket including delivery fees – was £25, mainly due to restaurants and shops raising their prices. It marked an 80p rise from an average of £24.20 the previous year.
It comes as Deliveroo continues to branch out from takeaway food to focus on grocery and retail deliveries as well.
Founder and chief executive Will Shu hailed the results as a “major financial milestone”.
He added: “I strongly believe that consumer trust is the key to unlocking further growth in this industry and that is why we are relentlessly focused on achieving a flawless delivery experience, along with ensuring fair pricing for our consumers.”
The firm said while it was “early days” for its retail delivery side, there had been “strong growth” in grocery deliveries, including an increasing number of shoppers using its platform for mid-sized baskets of between £30 and £60.
It comes following rider strikes and other protests calling on the industry to improve pay for delivery workers, who are often classed as self-employed.
The UK Supreme Court ruled last year that Deliveroo riders could not legally be considered employees of the company, partly because they did not have specified hours and could also work for rival firms.
The case was brought by the Independent Workers Union of Great Britain (IWGB), which had been seeking collective bargaining rights, as well as better pay and conditions, for staff.
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A Deliveroo spokesperson said it had recently struck a deal with the GMB union which had “increased the guaranteed minimum pay for the estimated period riders are on an order to £12 an hour, plus vehicle costs for all vehicle types”.
The company did not say if it planned to increase wages following its latest results.
The GMB said in an update to its members earlier this month it was “working to ensure that there are strong processes in place to ensure this is applied correctly”.
Tom Warnett, a regional organiser with the union, told Sky News: “It is good news to see Deliveroo move into profit and we want to see its continued success.
“That success must be shared with the riders who have made the company what it is. We are proud our members delivered the highest minimum pay guarantee in the sector. Now we need to see genuine estimates for orders so that all riders have the confidence pay is set fairly.”
‘Healthy set of numbers’
Julie Palmer, a partner at restructuring firm Begbies Traynor, described the results as a “remarkably healthy set of numbers”.
She added: “Deliveroo is accelerating fast at a time when many retailers are grappling with weaker consumer demand and lower discretionary spending.
“Looking ahead, Deliveroo looks well positioned for further gains as the macroeconomic backdrop improves and as consumers have a bit more cash to spend on indulgences like takeaways.”
Russ Mould, from investment platform AJ Bell, said it was a “significant milestone” for the company since its stock market float in 2021.
He added: “Significantly, this was also backed by positive free cash flow which, unlike profit figures, cannot be massaged to give a more favourable picture of performance.”
Deliveroo shares rose by more than 10% during trading on Thursday following the publication of the results.
It comes after rival delivery firm Just Eat last week posted results showing a 9% rise in sales by GTV – despite orders being broadly flat compared to the first half of last year.
