Deliveroo (ROO) shares jump 3% on strong demand: Should you buy?

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Deliveroo (ROO) shares jump 3% on strong demand: Should you buy?

 Deliveroo (ROO) shares jump 3% on strong demand: Should you buy?
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Highlights 

  • Deliveroo’s shares rose by 3 per cent on Thursday’s morning session, as delivery orders demand remained strong despite easing of restrictions.
  • It’s FY 2021 pro forma gross transaction value (exc. Spain) rose by 70 per cent (constant currency basis), which was at the top end of its guided range of 60 to 70 per cent.
  • The company’s monthly order frequency rose to 3.4 orders in Q4 2021, from 3.3 in Q3 2021 when lockdown like restrictions was removed.

 

UK based online food delivery group Deliveroo (LON: ROO) shares jumped 3 per cent after it reported strong delivery orders despite easement of restrictions during the period, in its latest trading update.

Deliveroo Q4 trading update

Deliveroo’s pro forma FY 2021 gross transaction value (GTV) (excluding Spain) rose by 70 per cent on a constant currency basis, to £6,631 million from £3,979 million in FY 2020.

Its 70 per cent growth was at the higher end of its upward revised guidance (as of October 2021) range of 60 to 70 per cent. Previously it had provided a guidance range of 50 to 60 per cent in July 2021.

And its pro-forma Q4 2021 GTV (ex. Spain) rose by 36 per cent (constant currency) to £1,733 million, from £1,307 million in Q4 2020.

The group’s Q4 2021 orders jumped by 42 per cent (reported currency basis) to 80.8 million, up from 56.8 million in Q4 2020.

FY 2021 orders stood at £300.6 million, higher by 73 per cent (on a reported currency basis) from £173.7 million in FY 2020.

Segment wise, the group’s UK and Ireland Q4 2021 GTV rose by 36 per cent (constant currency), and its FY 2021 levels rose by 71 per cent (constant currency).

International segment grew by 36 per cent in Q4 2021 and by 69 per cent in FY 2021.

 ROO trading update details

©2022 Kalkine Media®

Orders continue to rise despite lockdown easement

The company’s monthly order frequency rose to 3.4 orders in Q4 2021, up from 3.3 in Q3 2021 when lockdown like restrictions was removed.

When compared on a year-on-year basis, monthly order frequency in Q4 2020 had stood at 3.2.

Moreover, the group’s Q4 2021 average monthly active consumers jumped by 37 per cent to 8 million compared to Q4 2020, while it grew by 123 per cent when compared to Q4 2019 pre pandemic levels.

The group is scheduled to report its final results for the fiscal on 17 March 2022. It’s gross profit margin outlook remained unchanged at a range of 7.5 to 7.75 per cent.

 ROO monthly order frequency (MOF) details

©2022 Kalkine Media®

Related Read: Are Deliveroo (LON: ROO) shares worth buying now?

Deliveroo PLC (LON: ROO) share price performance

The company’s shares were trading at GBX 174.70, higher by 3.01 per cent on 20 January at 08:52 AM BST. Its market cap was at £2,975.63 million as of date. It was admitted to the LSE on 31 March 2021.

Tags: Deliveroo, trading update,

 

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