Deliveroo Slashes Forecasts After Cost-of-Living Crisis Hits Q2
2022.07.18 09:58
By Geoffrey Smith
Investing.com — Deliveroo (LON:ROO) slashed its guidance for 2022 on Monday after reporting a sharp slowdown in order volume growth in the second quarter, the latest stark illustration of the cost-of-living squeeze on consumer spending.
The food delivery group said gross transaction value – the total value of orders through its network – grew only 2% on the year in the three months through June, down from a rate of 12% in the previous quarter. GTV growth slowed to 4% from 12% in the key U.K. and Ireland market, and to only 1% from 11% in its other markets.
As a result of what it called “increased consumer headwinds”, it said it now only expects GTV growth to be in the range of 4%-12%, adjusted for foreign exchange, down from a previous range of 15%-25%.
The figures are consistent with a string of other negative news from the U.K. consumer sector in recent weeks, reflecting the impact of tax increases and a surge in energy prices that has pushed overall inflation up to its highest in over 30 years. The 4% U.K. GTV growth figure lags well behind the annual inflation rate of 9.1% in June.
However, Deliveroo said it still expects its loss before interest, taxes, depreciation and amortization to narrow this year. It left its EBITDA margin forecast unchanged at between -1.5% and -1.8%. Last year it had been -2.0%.
Deliveroo will publish full results for the first half on August 10th.
