SHARE OF THE WEEK

IT’S been a long way back for Deliveroo, but this week the food delivery firm’s shares hit their float price again.

It listed at 390p in March but was dubbed ‘Floperoo’ after the stock crashed by a third on its first day.

Now the shares are close to that level, having closed at 395p on Wednesday. They were slightly lower at 376.2p yesterday, valuing the firm at £7bn.

That follows a near-70pc rally from lows of 228p in April, compared to a 13pc drop suffered by rival Just Eat Takeaway over the same period. Along with continuing strong demand for takeaways, analysts have pointed to another compelling reason for this.

Following the boom in online groceries during the pandemic, investors are eyeing up a lucrative sequel: rapid grocery deliveries. These are services where customers can have convenience shopping delivered in as little as 20 minutes, using a smartphone app.

A plethora of British start-ups are battling it out over this space, from Getir to Weezy and Gorillas, but analysts say it is Deliveroo that’s hit the sweet spot. It is essentially now marketing itself as a logistics firm to potential partners, and has teamed up with firms such as Waitrose, Morrisons, Majestic Wines and Lloyds Pharmacy.

However, unlike Getir and other rivals, it is not investing in ‘dark stores’ or in buying goods itself. Jefferies says its first-mover advantage has made it ‘the definitive online food company’.

After such a disastrous start, that would be a tasty result for Deliveroo indeed.