The CEO of Deliveroo, Will Shu, recently sold £15 million worth of shares following the company’s first reported profit since it went public.
This sale comes as Deliveroo experiences a financial turnaround, marking a milestone in its business journey.
Details of the Share Sale
Between September 12 and 16, Will Shu sold 9.4 million shares valued at nearly £14.8 million. This move was reportedly to fund personal property investments. Despite this sale, Shu retains a significant stake, holding 95.8 million shares in Deliveroo.
It’s important to note that Shu does not participate in the company’s annual bonuses or long-term share award schemes, emphasising his commitment to the company’s broader strategic goals.
Financial Performance and Turnaround
Deliveroo has recently reported a profit of £1.3 million for the six months ending in June. This is a remarkable improvement, considering the £82.9 million loss reported for the same period the previous year.
Moreover, the company’s share price has increased by nearly 30% over the past year, indicating growing investor confidence. Deliveroo also announced a £150 million share buyback as a part of its financial strategy.
The company’s order volume rose by 2% to 147 million, and its gross transaction value increased by 5% to £3.69 billion, driven by stable food prices and a steady cost of living.
History and Growth of Deliveroo
Founded in London in 2013, Deliveroo began with Will Shu, an American-born former banker, personally delivering pizzas to friends.
Today, the company operates in ten markets and has a network of 140,000 delivery riders and partnerships with approximately 180,000 restaurants.
However, its journey as a public company has been challenging, including a high-profile initial public offering (IPO) in April 2021 valued at £7.6 billion, which saw a 30% drop on its first trading day due to concerns over its business model and the legal status of its riders.
Pandemic Impact and Diversification
Deliveroo flourished during the pandemic when hospitality venues were closed, but it faced difficulties as the cost of living crisis led to a decline in orders.
In an effort to diversify, the company expanded into non-food products, including a partnership with a home improvement retailer to deliver goods within London in as little as 25 minutes.
Share Market Response
Despite Shu’s substantial share sale, Deliveroo’s stock prices remained relatively stable, closing slightly up by ½p, or 0.25%, at 157¼p.
This stability suggests that investors still have faith in the company’s strategic direction and financial performance.
Future Prospects and Market Position
As Deliveroo continues to evolve, its expansion plans will be closely monitored by the market.
The company’s ability to maintain profitability in an increasingly competitive landscape will be a key indicator of its future success.
Deliveroo aims to build on its recent successes by diversifying its service offerings and entering new markets.
Conclusion
In summary, Will Shu’s sale of £15 million worth of shares was a significant personal financial move but did not shake investor confidence in Deliveroo.
The company’s successful financial turnaround and strategic initiatives suggest a positive outlook for the future.
Will Shu’s sale of shares, while notable, seems to be a personal financial decision rather than a lack of faith in the company.
Deliveroo’s recent profitability and ongoing strategic expansions indicate a robust and promising future for the company.
