Investing.com -- Shares in Deliveroo Holdings (LON:ROO) climbed over 5% on Thursday after the company reported a strong finish to 2024, with gross transaction value growth and profitability in line with its full-year guidance.
The online food delivery company also confirmed that it expects adjusted earnings before interest, tax, depreciation, and amortization for 2024 to reach the upper end of its guidance range, boosting investor confidence.
Deliveroo (OTC:DROOF) reported a 'robust' 6% increase in GTV for the year, aligning with its projected growth range of 5-9% in constant currency.
The company also said its expectation of adjusted EBITDA landing towards the top of its £110-130 million guidance range, underscoring its operational progress. Additionally, Deliveroo reported positive free cash flow for the full year, as anticipated.
GTV rose 7% year-on-year in constant currency during the quarter, driven by a 3% rise in orders and a 4% increase in GTV per order.
This growth was supported by enhancements to Deliveroo’s consumer value proposition (CVP), including an improved Plus loyalty program and strong gains in the grocery segment.
Deliveroo saw GTV growth accelerate across both its UK and Ireland and International markets. UK and Ireland’s GTV rose 9% in the fourth quarter, with order growth improving to 5% after a sluggish start to the year.
The company attributed this improvement to its initiatives that boosted customer retention and order frequency, despite ongoing challenges in the broader consumer environment.
Internationally, GTV increased by 5%, with growth strongest in the UAE and Italy. France showed slight improvement amid a challenging market, while Hong Kong remained under pressure from a highly competitive landscape. Excluding Hong Kong, International GTV grew by 10%, with a 6% rise in orders.
“One blemish is the evident GTV declines the Hong Kong business is seeing due to competition from Meituan,” said analysts at Jefferies in a note.
Group revenue for the year grew by 6% in constant currency, though Deliveroo noted a slight decline in its revenue take rate—down 40 basis points year-on-year—reflecting its planned investments in CVP.