Deliveroo shares fall 3% despite achieving profitability earlier than expected

Company hailed earnings of €7.5m in the second half of last year compared with a a loss of €84.6m a year earlier as 'a major achievement'

Deliveroo's most valuable market is in the UK and Ireland, where it generates the bulk of its revenues.

Shares in Deliveroo fell 3% even as the takeaway food delivery firm said it was making profits in the second half of last year and was confident about the year ahead despite the cost-of-living crisis raging across its major markets.   

"The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth," said its founder and chief executive Will Shu.

Deliveroo's most valuable market is in the UK and Ireland, where it generates the bulk of its revenues but consolidates the earnings into the same division. It also has major operations in Belgium, France, Hong Kong, Italy, Kuwait, Qatar, Singapore, and the UAE. 

The company hailed earnings of £6.6m (€7.5m) in the second half of last year compared with a a loss of €84.6m a year earlier as "a major achievement". 

It comes amid the inflation crisis that has squeezed household spending and increased its costs, but had returned to profitability earlier than expected, the company said.

"This is obviously one of the milestones to becoming more profitable, but I think we're really proud of this because we reached it 12 to 18 months before we said we would, and then in '23 we expect to make continued progress," Mr Shu said in an interview with Reuters. 

Mr Shu said the improvement was driven by optimising consumer fees, lower marketing spend and new revenue from advertising on its platform.

However, for the full year, Deliveroo posted a loss of £45m, although down from the £100m loss in 2021.

Deliveroo tapped a huge increase in demand during the pandemic, but has since been battling like most consumer businesses with rising costs and uncertain demand. 

The shares which fell 3% at one stage in the session are down sharply from the height of the pandemic in 2021.