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Deliveroo is betting on an expansion into non-food retail to boost future growth as the delivery firm reiterated its profit forecasts for the year ahead of the group’s first capital markets day today.
The launch of Deliveroo Shopping on the delivery app will see the business expand from its current takeaway and grocery offering into a wider range of retail products, including electronics, pet dood, flowers and toys.
Deliveroo said the move marked “a major step” in its growth journey and customers could choose to shop at high street and local neighbourhood shops across pharmacy, DIY, homeware, toys, petcare and other categories.
As part of the launch, Deliveroo has agreed an exclusive partnership with Screwfix, offering an initial range of 500 products.
Will Shu, Deliveroo founder and CEO, said in a statement on the London Stock Exchange: “One further driver of growth will be the expansion of our platform 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.”
Shu will give more detail on the new retail proposition in a presentation to analysts and investors this afternoon at its London office.
There will be no new information on current trading but Deliveroo upheld full-year guidance of lower single-digit percentage growth in gross transaction value and adjusted EBITDA in the range of £60-£80m.
Longer term, the group expected GTV growth to be in the mid-teens and adjusted EBITDA margin to reach 4% or higher.
“These ambitions reflect our commitment to driving sustainable growth and creating long-term value for our stakeholders,” Shu added.
“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 IPO. 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.”
Shares in the group jumped 2.1% to 148.3p as markets opened this morning.
Morning update
Real Good Food has “temporarily” suspended trading on London’s junior stock exchange as it battled to stay afloat.
A short statement this morning said the cake decoration specialist had requested the temporary suspension “pending clarification of the company’s financial position”.
Earlier this month, the group hired an insolvency specialist to explore options for the Renshaw business after selling the Rainbow Dust Colours brand.
The FTSE 100 continued to fall this morning, down another 0.4% to 7,429.56pts.
Early risers included Naked Wines, up 7.4% to 34.3p, Ocado, up 5.6% to 598.5p, Pets at Home, up 2.9% to 302.4p, and Just Eat Takeaway, up 2.9% to 1,286p.
Kerry Group is down 2% to €73.96, while Compass Group, Haleon and Unilever are down 1% to 2,051p, 0.9% to 332.5p and 0.7% to 3,761p respectively.
Yesterday in the City
The FTSE 100 dipped 0.1% to 7,455.24pts.
Greencore finished down 5.2% to 96.3p despite revenue and profit growth as investors focused on falling margins in the latest year.
Pets at Home received a 2.7% bump to 295p as the stock shrugged off a fall in first-half profits as the retailer said it was back in track on Q3.
Drinks ingredients firm Treatt rose 1.2% to 455.5p as retiring CEO Daemmon Reeves issued his last set of full-year results as boss.
Vape maker Supreme soared 13.8% to 125.2p after annoucing a bumper first half with record sales and profits.
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