Delivering uncertainty

Some companies have a reputation for being conservative with their guidance, underpromising, overdelivering and giving the market a happy little surprise on the upside. Deliveroo takes a slightly different approach, and at times it seems to base its playbook on the final scene of Monty Python’s Life of Brian, with everybody on their crucifixes singing: “Always look on the bright side of life.”

The company lost almost £300m last year and burnt up a quarter of its cash pile, which

CEO Will Shu described as “excellent progress on its path to profitability”.

The company has spent 10 expensive years on that path, and shares that floated at 390p in April 2021 are now yours for a bargain 88¾p. It has certainly achieved scale, with 150,000 riders delivering takeaways and groceries in 10 countries, and last year customers placed 299.2-million orders on the platform, a 5% increase on 2021.

With a considerable quantity of accounting tweaks, the company hit adjusted underlying profitability in the second half of the year, which Shu described as a “major achievement” that had come 18 months ahead of schedule.

The company was in an excellent position to benefit from the pandemic, as customers grew used to the convenience of somebody else fetching your takeaway while they were confined to barracks.

But now that normality has returned and the cost of living crisis continues to bite, there will inevitably be something of a comedown.

Deliveroo has been trying its luck in Kuwait and Qatar since last year, having raised the white flag in Australia and the Netherlands.