Deliveroo Makes First Profit as Customer Spending Increases

Deliveroo has announced a significant achievement, reporting its first-ever profit with a cash flow of £3 million. The company also unveiled a £150 million share buyback program, signaling confidence in its financial health. The average gross transaction value (GTV) per order increased to £25, reflecting a rise in prices from restaurants and shops, up from £24.20 the previous year. This growth comes as Deliveroo diversifies its offerings beyond takeaway food, focusing on grocery and retail deliveries. The firm emphasized the importance of consumer trust in driving future growth, with a commitment to providing a seamless delivery experience and fair pricing. While Deliveroo acknowledged that its retail delivery segment is still in its early stages, it reported strong growth in grocery deliveries, particularly among customers purchasing mid-sized baskets valued between £30 and £60. In a legal context, the UK Supreme Court ruled last year that Deliveroo riders are not classified as employees, allowing them to work for competing firms without specified hours. This decision followed a case initiated by the Independent Workers Union of Great Britain (IWGB), which sought better pay and working conditions for riders. In response, Deliveroo has reached an agreement with the GMB union to increase the guaranteed minimum pay for riders to £12 per hour, plus vehicle costs. Following the positive financial results, Deliveroo's shares surged by over 10% during trading on Thursday, reflecting investor optimism about the company's future prospects.