Deliveroo (ROO.L) share price rose 2.4% as the food delivery giant reported that the gross transaction value (GTV) of orders on its platforms rose 36% year-on-year in the fourth quarter.
The London-based group said that the number of orders grew 10% in the quarter, with customers placing 3.4 orders on average per month in the last three months of 2021.
This is higher than the 3.2 orders that were being placed during the height of lockdown in 2020. Food delivery surged during the COVID pandemic when pubs and restaurants had to close, and the popularity of the platforms has not gone down since lockdown was lifted.
The company said its monthly customer base had continued to grow despite the easing of lockdown restrictions, with 8 million active monthly customers in the quarter, up 37% year-on-year and up 123% on pre-pandemic levels.
Overall, last year the company’s GTV — a measure of customer spending — rose 70% to £6.6bn ($8.9bn) and the number of orders grew 73% to 301 million.
In the fourth quarter, GTV increased 36% year-on-year to £1.73bn, and orders were up 42% at 80.8 million.
Deliveroo also reaffirmed its gross margins for the year would be in line with the expected range of 7.5% to 7.75%.
“We finished 2021 with a strong Q4 performance, and our full year GTV growth of 70% in constant currency was at the top end of the previously-upgraded guidance we provided,” said chief executive Will Shu.
Share prices were up on Thursday morning on the back of the results, trading at 179p, a 5% increase, before dropping slightly.
The company floated at 390p per share in London in March 2021 but the shares plunged on the first day of trading. Despite making a slight recovery during the summer, Deliveroo shares have been sinking ever since, closing at 170p on Wednesday.
“Now that the government has announced the end of Plan B restrictions the market may be justified in wondering whether growth can continue at this level. In addition, the growing squeeze on the cost of living might mean UK consumers aren’t quite so keen on making too many orders through the app,” Chris Beauchamp, chief market analyst at IG Group, said.
“The shares nearly halved in December, which might suggest that plenty of bad news has already been priced in, but with the market more broadly still not keen to jump back into growth/tech stocks, the catalyst for a rebound doesn’t yet appear to be in place.”