Deliveroo reports 88% jump in orders, tempers margin forecast

FILE PHOTO: Deliveroo riders demonstrate to push for improved working conditions, in London, Britain, April 7, 2021. REUTERS/Toby Melville/File Photo

(Reuters) – Deliveroo’s orders jumped 88% during the June quarter, although the food delivery firm tempered its outlook for annual profit margins on Thursday, as it burns more cash and orders return to pre-pandemic levels.

The company, which listed in London in March, said growth in its annual gross transaction value (GTV) — a measure of the total value paid by customers apart from tips — is expected between 50% and 60%, up from the previously forecast 30%-40%.

Deliveroo said it saw an opportunity to invest more in growth opportunities in the second half of the year, without elaborating further. The higher spending, along with the expectation that average order values would return to pre-pandemic levels, would weigh on profit margins, it added.

The company maintained its annual gross margins forecast of 7.5% to 8%, but said margins would likely come in at the lower end of that range.

This is a second business update from Deliveroo after going public in a much anticipated stock market debut in March that saw its shares plunge 30%. The stock is currently down about 18% from its IPO price.

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