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Deliveroo PLC on Thursday said it would be returning £100 million of further excess capital to shareholders as it noted ‘encouraging signs’ in consumer activity.
The London-based food delivery company swung to a pretax profit of £12.2 million in 2024, from a loss of £10.9 million in 2023, as revenue rose 2.1% to £2.07 billion from £2.03 billion.
Orders were up 2.0%, rising to 296.0 million from 290.2 million, with gross transaction value advancing 5.3% to £7.42 billion from £7.06 billion.
Deliveroo said its increased orders reflected ‘encouraging signs of stabilisation in consumer behaviour’.
Its shares fell 8.0% to 114.60 pence on Thursday morning in London.
Gross transaction value per order improved 3.3% to £25.1 from £24.3.
Deliveroo said it intends to return up to £100 million of structurally surplus capital to shareholders, which it said represents its confidence in ongoing cash generation.
It reported free cash flow for 2024 of £85.5 million, swinging from negative free cash flow of £38.4 million the year before.
It expects the buyback programme to begin ‘shortly’, once its £150 million buyback scheme announced at its 2024 interim results completes.
Looking at 2025, it anticipates high single-digit percentage growth in gross transaction value in constant currency.
Adjusted earnings before interest, tax, depreciation and amortisation is expected to be between £170 million and £190 million. In 2024 adjusted Ebitda grew 52% to £129.6 million from £85.4 million.
However, Deliveroo delayed the delivery of its adjusted Ebitda margin target of more than 4%, pushing it back to the ‘medium-term’ from ‘by 2026’ as detailed at its capital markets event in November 2023. It said the ‘improvement in the consumer backdrop has taken longer than [it] expected.’
Founder & Chief Executive Will Shu commented: ‘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 [consumer value proposition].’
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