Deliveroo’s loss rises as business slows

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Deliveroo’s loss rises as business slows

The loss at Deliveroo increased by more than half to 147 m in the first six months of the year, with the embattled company facing a dramatic slowdown in revenue growth as the cost of living crisis affects demand for takeaways.

Simon Wolfson, the chief executive of the clothing retailer Next, has stepped down from the board with immediate effect, according to the London-listed company.

Wolfson, who joined the board 18 months ago in his first external directorship in three decades, said the role was no longer compatible with his executive and other commitments.

Deliveroo said revenues rose 12% year on year to 1.01 billion in the first six months, but pre-tax losses increased by 54% because of the soaring cost of delivery riders and staff, particularly in technology roles.

Revenue growth fell dramatically from 12% in the first quarter to only 2% in the three months to June, as consumers cut back on non-essential spending as household bills went up.

Will Shu, the chief executive and co-founder of Deliveroo, said that they have made good progress delivering on our profitability plan despite increased consumer headwinds and slowing growth during the period. We are confident in our ability to adapt financially to any changes in the macroeconomic environment. The company, which said it was closing its operations in the Netherlands, reported a 10% increase in deliveries year on year to 160 m in the first six months, while the monthly active customers increased by 4% to 7.8 million.

The gross transaction value per order of customers spent on a takeaway decreased by 4%, because consumers were spending more during lock-downs last year, according to the company.

The company pulled out of Spain last year and Germany in 2019 and beat analyst expectations, with investors nudging its share price by almost 4%.

The results were released last month after a downgrade for full-year total GTV growth of 4% to 12% from a previous forecast of between 15% and 25%.

Growth has slowed in the past quarter and the main reason it has managed to beat estimates was by cutting back marketing spend, said Danni Hewson, a financial analyst at AJ Bell.

The Share Price of Deliveroo, which made a terrible flotation in London in March 2021, has slumped by three-quarters in the past year, leading city watchers to call it Flopperoo.