A Deliveroo rider’s bike near Victoria Station on March 31, 2021 in London, England.
Dan Kitwood | Getty Images
LONDON – Shares in UK grocery supplier Deliveroo fell Thursday as the company warned that its growth could slow as economies reopen.
In its first trading update as a publicly traded company, Deliveroo announced that orders in the first quarter of 2021 more than doubled year over year to £ 71 million ($ 98 million). The total value of transactions on its platform rose 130% to £ 1.65 billion, Deliveroo said.
Even so, Deliveroo’s share price fell nearly 2% in morning trading after the company issued cautious forecasts for the full year.
In the update, Deliveroo said it was “hard to tell” how much growth in the first quarter was due to the “special circumstances” of lockdowns in some of its markets.
“The company continues to operate in an uncertain environment as the timing and effects of this lifting of restrictions in the coming weeks and months are unknown,” Deliveroo said Thursday.
“Deliveroo expects the rate of growth will slow down as lockdowns wear off, but the extent of the slowdown remains uncertain.”
Deliveroo said it was “prudent” and was sticking to guidelines contained in its IPO prospectus for the full year of 2021. The company forecasts gross transaction value growth between 30% and 40% and gross profit margin between 7.5 and 8%.
Deliveroo went public in London last month on what became one of the worst IPOs in the UK for a large company in history. The company’s shares fell as much as 30% on the first day of trading.
Analysts have blamed the Amazon-backed company’s poor performance on questions about its valuation, issues with gig worker rights, and intense competition in the food delivery space.
Deliveroo’s shares are now down 32% from its IPO price of £ 3.90. With a market cap of $ 6.4 billion, the company is now worth less than the $ 7 billion it valued in its last private round of financing prior to going public.
For its part, Deliveroo said it is “just starting out as a public company” and is “confident” of generating long-term returns for shareholders.
Earlier this week, British-Dutch competitor Just Eat Takeaway announced that its orders rose 79% in the first quarter, almost double the growth it had previously forecast. The company added that it expects orders to grow this year even if Covid-19 restrictions are lifted.