Deliveroo delivers strong grocery growth in H1 2024; reports first six-month net profit

Deliveroo has reported solid performance in its interim results for the first half of 2024, driven by execution on its strategic priorities, with a particular highlight being the strong growth in its grocery business.

Deliveroo shares surged more than ten percent Thursday after the international food delivery app struck its first six-month net profit, an achievement described as a "major milestone" by its boss.

Profit after tax stood at £1.3 million in the first half, which compared with a net loss totalling £83 million in the January-June period last year, as the British company continued to cut costs and as revenue edged higher.

"I am pleased with the performance we have achieved this half," chief executive Will Shu said in an earnings statement, 11 years after establishing the group.

The food delivery giant saw its gross transaction value (GTV) increase by 6 per cent year-on-year in constant currency. This was accompanied by a 2 per cent in revenue and a return to order growth of 2 per cent, all while maintaining a stable gross profit margin.

A key area of success was Deliveroo's grocery offering, which reached 14 per cent of group GTV in the first half of the year. This broad-based growth across markets was driven by improvements to the customer experience, increased awareness, and further penetration in mid-sized baskets (£30-£60).

The company also highlighted positive inflections in consumer behaviour, with frequency returning to growth and retention improving, supported by enhancements to Deliveroo's loyalty programme, including the introduction of a new premium tier, Plus Diamond.

Deliveroo maintained its guidance for the full year 2024, expecting GTV growth in the range of 5-9 per cent in constant currency and adjusted EBITDA in the upper half of the previously guided range of £110-130 million.

“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,” Shu said.