Deliveroo updates long-term target as it looks beyond food

(Sharecast News) - Deliveroo updated its longer-term target for gross transaction value growth on Wednesday as it held its first in-person capital markets event.

The London-listed food delivery giant said it now expected medium-term gross transaction value growth in the mid-teens regarding annual percentage growth at constant currency.

It reiterated its guidance for 2023, with gross transaction value growth expected to be in the lower single digits in terms of percentage growth at constant exchange rates.

Adjusted EBITDA for the year was anticipated to be in the range of £60m to £80m.

Deliveroo reiterated its long-term profitability target to reach an adjusted EBITDA margin of at least 4% of gross transaction value by 2026, with further upside beyond that.

Deliveroo also took the wraps off its plans to launch a new retail proposition beyond food delivery, expanding the platform to hard lines and non-food retailers.

"I'm pleased to be hosting Deliveroo's first capital markets event today - it has been 11 years since Deliveroo was founded and almost three years since our initial public offering," said founder and chief executive officer Will Shu.

"I am excited as ever about the future of the business - there continues to be significant headroom for growth.

"We remain relentlessly focused on improving the delivery experience and providing value for money to consumers.

"I believe that this is critical to unlocking the full growth potential in our industry and I am exceptionally proud of the work our team has done in this area already."

Shu said a further growth driver would be the platform's expansion to encompass retail, such as DIY, homeware and electrical goods.

"This enhancement of our offering will leverage our existing capabilities to bring more of the neighbourhood to consumers' doors.

"Looking ahead, we are updating our medium-term gross transaction value growth target to mid-teens percentage growth per annum, and we remain on track to deliver our 4%-plus adjusted EBITDA margin target by 2026.

"These ambitions reflect our commitment to driving sustainable growth and creating long-term value for our stakeholders."

At 0916 GMT, shares in Deliveroo were up 1.54% at 147.53p.

Reporting by Josh White for Sharecast.com.