Deliveroo slashes revenue outlook on deteriorating UK economy

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The group said its full-year gross transaction value (GTV) growth was now expected to be in the range of 4% to 12% in constant currency versus previous guidance of 15% to 25%.

Deliveroo said second quarter GTV growth slowed to 2% from 12% in the first quarter.

It said this reflected “the impact of increased consumer headwinds” during the second quarter.

Confidence levels among Britain’s consumers sank to a record low last month as they struggle with the accelerating cost of living. Wages are failing to keep pace with inflation that hit a more than 40-year high of 9.1% in May and is heading for double digits.

Deliveroo said second quarter growth in orders was 3% year-on-year, while GTV per order fell slightly year on year, as basket sizes were higher during COVID-19 lockdowns for part of the same quarter last year.

The group maintained its margin guidance for the year.

It continues to expect 2022 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) margin to fall 1.5% to 1.8%, compared with a fall of 2.0% in 2021.

“Management is confident in the company’s ability to adapt financially to a rapidly changing macroeconomic environment, through gross margin improvements, more efficient marketing expenditure and tight cost control,” it said.