Deliveroo expects the rate of growth to decelerate as lockdowns ease, but the extent of the deceleration remains uncertain
Shares of British food delivery firm Deliveroo fell on Thursday, as the company warned its growth could slow down as economies start to reopen.
In its first trading update as a public company, Deliveroo said it had 71 million orders in the first quarter of 2021, more than double the 33 million orders booked through its service in the same period a year earlier.
The total value of transactions on its platform, meanwhile, climbed 130% to £1.65 billion, Deliveroo said.
Despite this, Deliveroo’s stock price tumbled 3.8%, closing at a price of £2.60, after the company gave cautious guidance for the full year.
In the update, Deliveroo said it was “difficult to say” how much of its growth in the first quarter was driven by the “special circumstances” of lockdowns in some of its markets.
The Company continues to operate in an uncertain environment given that the timing and impact of these restrictions being lifted in the coming weeks and months remain unknown, Deliveroo said Thursday.
Deliveroo expects the rate of growth to decelerate as lockdowns ease, but the extent of the deceleration remains uncertain, it said.
The food delivery firm said it was being “prudent,” sticking to the full-year 2021 guidance it gave in its IPO prospectus. The firm is forecasting gross transaction value growth of between 30% to 40% and gross profit margins of 7.5 to 8%.
Deliveroo went public in London last month, in a debut that became one of the worst U.K. IPOs for a large company in history. The firm’s shares slumped as much as 30% in its first day of trading.
Analysts have attributed the Amazon-backed company’s lacklustre performance to questions around its valuation, gig workers’ rights issues and intense competition in the food delivery sector.
Deliveroo’s shares are now down over 33% from its IPO price of £3.90. And, with a market cap of $6.4 billion, the company is now worth less than the $7 billion it was valued at in its last private financing round before going public.
For its part, Deliveroo said it’s “just starting life as a public company” and is “confident” in its ability to deliver long-term returns for shareholders.