Deliveroo hails first year of profit but shares tumble on downbeat outlook

(Sharecast News) - Deliveroo hailed its first ever year of profit and positive free cash flow on Thursday as it expanded its grocery and retail offering, but the shares tumbled as it highlighted an "uncertain" consumer environment. In the year to the end of December 2024, Deliveroo made a profit of £2.9m, versus a loss of £31.8m a year earlier, while adjusted earnings before interest, tax, depreciation and amortisation rose 52% to £129.6m.

Free cash flow came in at £85.5m, compared to negative free cash flow of £38.4m in 2023.

Gross transaction value rose 6% and revenue was up 3% at constant currency - 5% and 2%, respectively, in reported currency - with orders up 2% and marking a return to growth.

For 2025, Deliveroo expects GTV to be high-single digits percentage growth at constant currency, while adjusted EBITDA is expected to be between £170m and £190m, as it makes targeted investments "to capture future growth opportunities".

Founder and chief executive Will Shu said: "Over the past year, we have been relentlessly focused on making the Deliveroo experience even better. The robust results we've announced today, with our first full year profit and positive free cash flow as well as GTV growth across our verticals, demonstrate that our strategy is working.

"We continued to deliver value to consumers by incentivising partners to reduce mark-ups and by significantly enhancing our loyalty programme. Our dedication to making every order perfect is having a meaningful impact on consumer satisfaction, as reflected in our net promoter score.

"Whilst the consumer environment remains uncertain, I am confident that we can continue to deliver growth by focusing on the levers in our control: supporting our restaurant partners to meet untapped consumer demand around new occasions, expanding our grocery and retail offering, and continuously improving our CVP."

At 0940 GMT, the shares were down 9% at 113.40p.

Russ Mould, investment director at AJ Bell, said: "Deliveroo's results are like receiving a takeaway order with free prawn crackers but missing the fried rice. The company reporting its full year of profit along with positive free cash flow is a big milestone, but it is spoilt by a bleak assessment of the outlook.

"Deliveroo references an uncertain consumer environment - for people to splash out regularly on takeaways, they need to have a decent amount of disposable income and feel confident about their finances.

"Moving into groceries may help at the margin but it is unlikely to be enough to mitigate a major decline in takeaway volumes.

"These results come hot on the heels of Deliveroo announcing its exit from the Hong Kong market. The takeaways space is cutthroat and if you are sub-scale, it is hard to make it pay, so ultimately this was probably the right decision.

"However, it doesn't exactly present a picture of a business which is on the front foot and the recent bid for Just Eat Takeaway by well-resourced tech investor Prosus means an already competitive landscape arguably just got even trickier."