Deliveroo brings in a profit on a climb in revenues
After a damaging loss last year, instant food delivery company Deliveroo has posted a profit at the EBITDA level on a 3% lift in revenues.
It says the economic backdrop is still uncertain, but the group said profit improvement was boosted by ‘efficiencies in the delivery network, optimisation of marketing spend, overheads savings and a higher advertising contribution’. The big question is whether this can continue.
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Deliveroo
Deliveroo, a delivery company based in London, has impressed investors by increasing its revenue and growing steadily despite the challenging economic conditions. This positive development is reflected in the company's share price chart, which shows a clear rise during the trading session. While the share price has slightly decreased from its peak after 40 minutes of trading, it is still up 3 percent. At one point, the share price even reached its highest level since February.
Deliveroo's long-term outlook
However, despite these recent gains, Deliveroo's long-term outlook remains uncertain. The red dotted line on the chart represents the company's initial public offering (IPO) price when the stock debuted in March 2021. Unfortunately, the share price dropped by 30 percent on the first day of trading. Although it briefly surpassed this level in August 2021, it has struggled since then due to concerns about its future performance and profit warnings.
Deliveroo's shares
While there has been a significant improvement in Deliveroo's shares recently, with a 104 percent increase from the lows experienced in August 2022 to the recent highs in November 2022, the overall performance of the company's shares has been lackluster compared to the broader trend. Deliveroo did manage to make a profit this year after reporting a loss in the previous year, and its revenue has increased by 3 percent. However, the company is counting on better figures in the remaining months of 2024 to boost investor confidence.
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