British food delivery firm Deliveroo reported a small profit in the first half of the year, inching into the black for the first time ever after logging growth in consumer demand.
The company, which is backed by e-commerce giant Amazon, said in its first-half earnings release on Thursday that it made a net profit of £1.3 million ($1.65 million) in the six months through June, bouncing from a loss of £82.9 million in the same period last year.
The company’s result followed what it called an “positive inflection” in consumer demand, “with frequency returning to growth and retention improving, supported by improvements in our consumer value proposition (‘CVP’).”
Deliveroo’s gross transaction value climbed 6% on constant terms, hitting £3.7 billion in the first half of the year. Its revenue rose 2% to £1,028.2, as the firm posted a 2% increase in orders processed on its platform to 147.4 million over the period.
Shares of Deliveroo climbed 8% to £1.37 by 11:40 a.m. London time on the back of the firm’s earnings report. Deliveroo’s shares remain well below their IPO price of £3.90. Back in 2021, the company’s shares plunged as much as 30% on the day of their float.
“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 most of our markets,” Deliveroo CEO and co-founder said in a statement Thursday.
“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.”
Deliveroo also reported positive free cash flow of £3.2 million in the first six months of the year, up from negative free cash flow of £27.7 million in the same period of 2023.
Deliveroo has previously faced doubts over its ability to generate a profit out of food delivery — a historically cost-intensive, low-margin business that requires significant scale to perform competitively.
The space has seen heightened consolidation in recent years — in May Uber acquired Delivery Hero’s Foodpanda online takeout brand in Taiwan for $950 million to expand its Uber Eats platform.
The company said it expects its 2024 full-year adjusted earnings before interest, tax, depreciation, and amortization to fall in the upper half of its previously guided range of £110 million to £130 million.
It kept its 2024 gross transaction value growth rate target of 5% to 9% and its guidance for positive annual free cash flow unchanged.
Deliveroo also announced a £150 million share buyback Thursday, saying it would look to purchase some of its issued shares on the market with the aim of taking them out of circulation and returning cash to the company’s investors.
