Investing.com -- Shares of Deliveroo (LON:ROO) jumped on Thursday after the company reported a turnaround, posting its first-ever half-year profit and generating positive free cash flow. The results marked a milestone for the company, signaling a shift from loss-making to profitability.
At 3:50 am (0750 GMT), Deliveroo was trading 7.1% higher at £136.60
For the six months ended June 30, the food delivery giant swung to a profit of £1 million, from a loss of £83 million in the same period last year. The company generated a positive free cash flow of £3 million, a significant improvement from the £27.7 million cash outflow recorded in the previous year.
Driving this turnaround was a combination of factors, including robust top-line growth, improved operational efficiency, and a more favorable consumer environment. Gross transaction value (GTV) climbed 6% to £2.5 billion, while revenue increased 2% to £1.03 billion on a constant currency basis.
Deliveroo's focus on enhancing its consumer value proposition also paid dividends. The company's loyalty program, Plus, saw significant upgrades, including the launch of a premium tier, Plus Diamond. This, coupled with expanded retail partnerships, contributed to increased customer satisfaction and retention.
“Looking ahead, while there is continued uncertainty in the external environment, I am encouraged by the inflection we are currently seeing in consumer behaviour in many of our markets,” said Will Shu, chief executive at Deliveroo.
Deliveroo remains optimistic about its prospects, with expected GTV growth of 5-9% and adjusted EBITDA expected to be in the upper half of the previously guided range of £110-130 million. The company also confirmed its expectation of positive free cash flow for the full year.
Deliveroo also announced a new £150 million share buyback program, bringing the total to £450 million.