Food delivery firm Deliveroo said its orders more than doubled in the quarter to the end of March, in its first trading update since its highly-anticipated IPO in London last month proved underwhelming.
Growth accelerated for the fourth consecutive quarter, the company said, with group orders up 114% year-on-year to 71 million and gross transaction value (GTV) up 130% year-on-year to £1.65 billion (€1.9 billion).
Chief Executive Will Shu said demand was strong in both UK and Ireland and its international markets, driven by record new customer growth and sustained demand from existing customers.
"This is our fourth consecutive quarter of accelerating growth, but we are mindful of the uncertain impact of the lifting of COVID-19 restrictions," he said on Thursday.
"So while we are confident that our value proposition will continue to attract consumers, restaurants, grocers and riders throughout 2021, we are taking a prudent approach to our full year guidance."
The company said it was maintaining its guidance for full-year GTV growth of between 30% to 40% and gross profit margins of 7.5-8.0%.
Deliveroo said it was difficult to know how much of the growth was driven by the lack of opportunity to eat out in cafes and restaurants in COVID-19 lockdowns, adding that it expected the rate of growth to slow as restrictions eased.
Commenting on its performance, Russ Mould, investment director at AJ Bell, said, “Troubled investors who backed Deliveroo at its IPO will have been keeping their fingers crossed for a bit of kangaroo action with the share price following its latest trading update. Alas there is no hopping forward on this news, despite impressive growth figures.
“There are two ways of looking at this situation. First, Deliveroo could see a drop in demand as more people are able to get out and about, particularly going out for meals rather than sitting at home waiting for the food delivery driver to arrive.
“Second, the company has no doubt been told by its advisers that it is better to under-promise and over-deliver in the first year as a listed company. Deliveroo’s reputation has already been shattered because of the big share price drop straight after listing. It doesn’t want to risk another slump by being too aggressive with earnings guidance and failing to meet it.”
Deliveroo's float in London was heralded at the debut of the decade, but it soured when the stock fell 30% on the first day, wiping more than £2 billion off the company's initial £7.6 billion valuation.
Some of Britain's biggest investment companies shunned the listing, citing concerns about gig-economy working conditions and the share structure.
The shares have continued to decline and closed at 268 pence on Wednesday, 31% below the 390 pence they were priced at in the float.