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Deliveroo beats expectations after rocky IPO

by LLB Editor
11th Aug 21 10:56 am

After a disastrous start to life as a public company led some wags to denote takeaways platform Deliveroo ‘Flopperoo’, the company appears to be flipping things around and clawing back a little credibility.

“News it had hired a prized Amazon executive in a top technology role and German rival Delivery Hero’s decision to take a sizeable stake in the business have helped lift the share price and kick-start its rehabilitation and there is at least nothing in Deliveroo’s first half results to undermine that process,” said AJ Bell’s Danni Hewson.

“Both the value and volume of orders came in ahead of what was expected in the first half and its coffers look pretty full – boosted by the IPO cash.

“Deliveroo critics will continue to point to issues with the way it treats its delivery riders and the fact it is still a long way from serving up a profit, despite its recent bumper trading.

“The need for scale, fierce competition and significant costs associated with the takeaway sector means further consolidation could be on the cards.

“Hopes that the Delivery Hero stake-building might be a precursor to a full bid look premature however, given Deliveroo founder Will Shu has a controlling position under the company’s dual class structure which would allow him to rebuff any deal for the next three years.”

 

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