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Deliveroo (ROO) -4.33% after another loss, but food orders double
Deliveroo (ROO) shares fell on Wednesday as investors headed to the sidelines after the food delivery company posted another loss in its first post-IPO report.
Deliveroo (ROO) said that orders doubled as revenue soared to £922.5m in the six months to June, but shares slipped 4.33% in trading on Wednesday as investors ‘lost appetite’ for the food delivery app.
Deliveroo’s loss-making has been a sticking point for bears and there was no sign of a rebound to profit during the latest period, though losses did fall from £128.4m to £104.8m.
This was helped by a surge in food orders, with the 148.8 million total up considerably on the 74.5 million figure from a year ago as the total value of transactions topped £3.4bn.
Revenues also look very healthy after jumping 82% to more than £922.5m as concerns about a post-lockdown slump did not materialise.
However, investors have still not warmed up to Deliveroo after its disastrous IPO when shares cratered 30% on market debut on concerns about the company’s gig economy model for riders.
Hargreaves Lansdown analyst Susannah Streeter noted that the pandemic provided Deliveroo with a “structural growth opportunity”, though many are still waiting on a clear path to profitability.
She added: “Investors appeared to have lost a little appetite for shares in early trading, with the company expecting customer behaviour to moderate later in the year”.
Deliveroo did get a boost earlier in the week after Delivery Hero, based in Germany, bought a small stake in the company.
Delivery Hero’s CEO Niklas Östberg believes that Deliveroo is now “undervalued” after a highly anticipated float that saw it “oversold”.
Deliveroo also revealed in midweek that its gross margin fell to 7.8% following its latest investment in grocery delivery.
ROO shares rallied very briefly on Wednesday before declining and eventually finishing 4.33% lower at 341p.
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