Deliveroo is set to propose a substantial shareholder dividend amidst improved financial performance.
- Deliveroo has reduced its financial losses significantly in the first half of the year.
- The company’s adjusted EBITDA shows profitability ahead of expectations due to strategic financial management.
- An increase in customer spending per order has contributed to a revenue rise, despite fewer orders being placed.
- Deliveroo has completed significant share buybacks and is exploring further capital returns to shareholders.
Deliveroo is contemplating a shareholder payout of up to £250 million via dividends, as the company demonstrates increased confidence after markedly reducing its losses. In the first half of the year, Deliveroo reported a significant reduction in losses, decreasing from £153 million to £83 million. This improved financial position has sparked considerations for substantial shareholder dividends, reflecting a strategic shift towards enhanced profitability.
According to the financial metrics utilized by Deliveroo, specifically the adjusted EBITDA metric, the company has achieved profitability ahead of its anticipated schedule. The food delivery service’s founder and CEO, Will Shu, remarked on the transformation, stating, ‘The company fundamentally is at a very different place to when we went public 30 months ago.’ This indicates the successful implementation of their financial strategy, aiming for long-term growth and stability.
During this financial period, Deliveroo has seen a 5% increase in revenue, rising from £973 million to £1.02 billion. This increase has been driven by an uptick in customer spending per order, despite a 6% decrease in the number of orders due to prevailing challenging macroeconomic conditions. This highlights the company’s ability to adapt to fluctuating market circumstances and underscores its resilience in periods of economic uncertainty.
In March, Deliveroo announced a £50 million share purchase programme, following the completion of another £75 million buyback scheme earlier in January. The company is now evaluating options to return an additional £250 million of surplus capital to its shareholders, showcasing a commitment to enhancing shareholder value and maintaining a robust capital allocation strategy.
Will Shu indicated that these decisions align with investor expectations for more rapid returns following increases in interest rates. Furthermore, Shu clarified that these strategic moves are not influenced by the impending expiration of his dual-class shares, which afford him increased voting rights. This transparency is pivotal in maintaining investor trust and reinforcing Deliveroo’s image as a forward-thinking entity in the food delivery sector.
Deliveroo’s strategic financial decisions and increased profitability signal its commitment to shareholder value and long-term growth.
