Deliveroo shares slide as 350 jobs loss spooks market confidence

Mar 19, 2023 | blog

Deliveroo shares have continued to pedal downwards this morning as traders wrestle to regain confidence within the model following its choice to slash some 350 job roles and disastrous IPO itemizing.

It comes because the meals supply group, which has seen its share value fall consecutively over the previous 12 months on account of robust market circumstances, posted a 14 per cent income enhance to £1.9bn – nevertheless it didn’t seem like sufficient to sway market confidence.

The listed takeaway service revealed web money was down 23 per cent to £996m from £1.2bn in the identical interval final 12 months as chief Will Shu famous that the macroeconomic outlook for the corporate “remains uncertain”.

The pandemic favorite, additionally reported a gross revenue rise of 30 per cent of £643m up from 495m in 2021.

“The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth,” Shu mentioned.

The fall in investor confidence comes as Shu introduced final month that he had been pressured to slash 350 job roles throughout all ranges because it makes an attempt to navigate a tough financial outlook and a decline in take away gross sales publish pandemic.

At the time, the chief confessed that the corporate grew its headcount “very quickly” –  a results of the Covid-19 pandemic which noticed shoppers lean closely on takeaway companies as eating places had been legally required to shut.

While the supply service seems to be on the trail to restoration, a sequence {of professional}  mishaps has shattered investor confidence within the teams.

Last summer season, Deliveroo slashed gross sales forecasts predicting that the rising value of residing would result in a slowdown in client spending.

Moreover, the group’s disastrous £8bn itemizing in March 2021, noticed shares plunge 60 per cent final 12 months – they’ve struggled to get better since.

John Coldham, retail associate at Gowling WLG, mentioned: “Following the boom during the pandemic for food delivery services, Deliveroo has experienced a drop in sales as demand begins to normalise, particularly with the current cost of living crisis meaning consumers’ appetite to order takeaways is low.”

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