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Deliveroo shares have continued to pedal downwards this morning as investors struggle to regain confidence in the brand following its decision to slash some 350 job roles and disastrous IPO listing.
It comes as the food delivery group, which has seen its share price fall consecutively over the past 12 months due to tough market conditions, posted a 14 per cent revenue increase to £1.9bn – however it did not appear to be enough to sway market confidence.
The listed takeaway service revealed net cash was down 23 per cent to £996m from £1.2bn in the same period last year as chief Will Shu noted that the macroeconomic outlook for the company “remains uncertain”.
The pandemic favourite, also reported a gross profit rise of 30 per cent of £643m up from 495m in 2021.
“The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth,” Shu said.
The fall in investor confidence comes as Shu announced last month that he had been forced to slash 350 job roles across all levels as it attempts to navigate a difficult economic outlook and a decline in take away sales post pandemic.
At the time, the chief confessed that the company grew its headcount “very quickly” – a result of the Covid-19 pandemic which saw consumers lean heavily on takeaway services as restaurants were legally required to close.
While the delivery service appears to be on the path to recovery, a series of professional mishaps has shattered investor confidence in the groups.
Last summer, Deliveroo slashed sales forecasts predicting that the rising cost of living would lead to a slowdown in consumer spending.
Moreover, the group’s disastrous £8bn listing in March 2021, saw shares plunge 60 per cent last year – they have struggled to recover since.
John Coldham, retail partner at Gowling WLG, said: “Following the boom during the pandemic for food delivery services, Deliveroo has experienced a drop in sales as demand begins to normalise, particularly with the current cost of living crisis meaning consumers’ appetite to order takeaways is low.”