Shares in Deliveroo fell as much as 9% on Thursday despite the firm posting its first full year of profit.
Deliveroo stock dipped to £1.14 as the London-based delivery app reported a swing from a £31.8m loss for the year ended December 2023 to a total profit of £2.9m at the end of last year.
The profit was driven in part by a slight bump in orders and the value per order, with revenue increasing 2%.
The company said a focus on its premium subscription offering in 2024 was a significant boost for its accounts.
Last year, Deliveroo bundled a number of new customer loyalty programmes into its Gold premium tier, and launched a more expensive Plus Diamond tier in the UK as on-demand delivery companies battle for customer loyalty.
The directors also lauded the firm’s growth in grocery and retail delivery. In 2023, grocery delivery made up 13% of the group’s gross transaction value (GTV), which rose to 16% last year.
Deliveroo has also been hoping its expanded retail offering, with partnerships with brands like Wilko, The Perfume Shop and Not On The High Street in the UK, and international retailers like Toys R Us in other countries, boosting hopes that long term profit will come from diversifying its product line.
The London-listed firm’s profit swing has done little to impress the markets, with GTV growth reaching the bottom end of the 5-9% growth range forecasted in its interim trading update.
Deliveroo has nonetheless been keen to reward its investors, having spent £90m so far on its planned £150m share buyback scheme and has announced plans to buy a further £100m worth of its own shares.
The UK and Ireland remains Deliveroo’s strongest market with an EBITDA increase of 8%, reaching £273.9m in 2024, compared with £101.6m from its international markets.
In an effort to focus on profitability, the company announced this week it would be exiting from Hong Kong, a move that came despite assurances from CEO Will Shu in August that the company was not planning any market withdrawals.
Deliveroo shares have fallen nearly 20% since the start of the year.
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