British food delivery company Deliveroo reported first-half profits, citing signs of a recovery in consumer spending as it pushes further into grocery and retail delivery.
The company made a £1 million profit in the first half of this year, its first since launching in 2013, after reporting a loss of £83 million in the same period last year.
The company said in its financial results that it has seen “encouraging signs in consumer behavior” and “positive changes” in most markets, with repeat purchases improving during the period. Total referral fees and delivery charges across its businesses increased 6% globally and 7% in the UK and Ireland in the first half of 2024.
This includes strong growth in its grocery business and a continued focus on retail delivery, with Deliveroo saying it is seeing positive early progress. The company has prioritised efforts in categories such as toys, flowers and homewares based on consumer demand, and has expanded partnerships with leading brands in the UK and UAE, including Holland & Barrett, B&Q and Toys R Us.
Following the news, Deliveroo shares rose 8.6% to 138.8p in morning trading on Wednesday.
Will Shu, founder and CEO, said: “We are pleased with the performance we achieved during the half, as we effectively executed on our growth and profitability initiatives, achieving two of our key financial targets: positive free cash flow and positive net income.”
Management has sought to diversify its business to boost sales as it struggles to recover after lockdowns are eased during the pandemic. Delivery apps such as Deliveroo thrived during the pandemic as people stayed home and spent more on takeaway meals while restaurants were closed.
Skyrocketing inflation has forced consumers to curb their spending over the past two years, forcing Deliveroo to cut 350 jobs earlier this year to make up for a fall in online orders.
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“Looking forward, although the external environment remains uncertain, we are encouraged by the changes in consumer behavior we are currently seeing in many markets,” Xu said.
“Deliveroo’s platform is stronger than ever as we continue to optimise our proposition for consumers, delivery drivers and merchants whilst adapting to the external environment.”
