Delivery platform Deliveroo has posted a heftier loss while also announcing the departure of Next chair Lord Simon Wolfson from its board.
In its half-year results, the London-listed firm posted an adjusted EBITDA loss of £68m, a wider loss than the £26m posted in the first half of 2021.
However, it marked an improvement of the £106m loss seen in the second half of 2021, after a boost to gross profit and marketing investment efficiencies.
Deliveroo also posted a loss before tax of £147m, an increase from £95m in the second half of 2021.
What’s more, retail titan Lord Wolfson said that after “much consideration” and “with regret,” he was stepping down from the company’s board.
“I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments,” he said.
Revenue increased 12 per cent to just over £1bn, after a growth in commission revenue and consumer fees. This was the first time Deliveroo has posted sales of this sum in half-year results on record and beat analyst expectations.
Elevated consumer fees also pushed up gross profit to £301m, up 16 per cent. This was also partly down to increased contribution from advertising revenue.
Growth slowed sequentially in the second quarter with gross transaction value (GTV) sitting at two per cent, compared to the first quarter’s 12 per cent.
The firm put this down to increased consumer headwinds, with households across the country facing bill increases amid historic levels of inflation.
“Demand softened in the second quarter compared to the first as consumers became more cost-conscious in the inflationary environment, although Deliveroo said it has continued to gain market share in core markets like the UK, France and Italy and reiterated its full year ambitions,” Joshua Warner, market analyst at City Index, added.
The business was focused on “the milestone of adjusted EBITDA profitability and then on to positive free cash flow generation,” Will Shu, founder and CEO of Deliveroo, said.
In 2022 so far, the company had made “good progress delivering on our profitability plan”, even with “increased consumer headwinds and slowing growth during the period.”
“We are confident that in the second half of 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives,” Shu added.
Earlier this summer, Deliveroo slashed its sales forecasts as it predicted the rising cost of living would lead to a slowdown in consumer spending this year.
Bosses had warned economic headwinds in the months ahead would lead to growth in the range of 4-12 per cent, down from previous guidance of 15-25 per cent.