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Deliveroo Shares Fall as Annual Revenue Misses Estimates

Deliveroo Shares Fall as Annual Revenue Misses Estimates

Shares in Deliveroo Holdings PLC (LON:ROO) experienced a dip on Thursday after the company’s preliminary full-year results showed lower-than-expected annual revenue and a warning of an uncertain trading environment in 2023. The U.K.-based food delivery service reported a top-line figure of £1.97 billion, indicating a growth rate of 14% compared to the previous year, but still missing Bloomberg consensus estimates of £2.03 billion.

Despite this growth, the company’s share prices fell by over 5% following the announcement. Deliveroo attributed the revenue miss to supply chain disruptions, particularly due to COVID-19-related restrictions, which hampered its ability to provide efficient delivery services to customers. The company also cited a competitive market environment as a factor that impacted its financial performance.

Deliveroo CEO Will Shu acknowledged the challenging circumstances faced by the company in the past year but expressed confidence in the company’s resilience and long-term prospects. “We have built a platform that is increasingly delivering value to consumers, riders, and restaurants,” Shu said in a statement.

Looking ahead, the company warned of a potentially uncertain trading environment in 2023, citing the ongoing impact of COVID-19 and the possibility of regulatory changes that could affect its operations. Despite these potential challenges, Deliveroo plans to continue investing in its platform and expanding its geographic reach.

The company’s full-year results also revealed a surge in its active customer base, which increased by 39% to 9.2 million, while the number of orders grew by 20% to 277 million. Deliveroo’s gross transaction value also increased by 11% to £5.5 billion.

In response to the revenue miss and uncertain outlook, analysts have issued mixed opinions on Deliveroo’s future prospects. While some remain optimistic about the company’s potential for growth, others have expressed concerns about the competitive landscape and the potential for regulatory changes.

Overall, Deliveroo’s annual revenue miss and warning of an uncertain trading environment have resulted in a dip in share prices. However, the company’s strong user base and transaction growth suggest that it remains well-positioned to capitalize on the growing demand for food delivery services, even in the face of challenging market conditions.

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