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(Alliance News) - Recently listed takeaway food company Deliveroo on Thursday raised its guidance for gross transaction value but warned that its margin will be in the lower half of its previously guided range.
Deliveroo explained that it is accelerating investments and it expects average order value to revert to its pre-Covid level.
The company lifted full-year gross transaction value guidance after a better-than-expected second quarter - though it does expect a slowdown in growth in the second half.
Gross transaction value for the second quarter of 2021 was up 76% year-on-year to GBP1.74 billion, with orders rising 88% to 78 million.
"Deliveroo has seen continued strong growth and consumer engagement in H1, and as a result of that plus increased expectations for H2 is increasing the guidance for full year annual GTV growth from between 30% to 40% to between 50% to 60%," it said.
Deliveroo also confirmed its full-year gross profit margin guidance, though expects this to be in the lower half of its previously communicated range.
Gross transaction value of GBP3.39 billion, up 99% year-on-year, for the first half implies a result of GBP2.93 billion for the second half at the midpoint of guidance, which would mark a slower annual growth rate of 24%.
Deliveroo shares were up 2.9% at 330.00 pence early Thursday. The stock listed in March at 390p.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.9% at 7,086.74
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Hang Seng: down 2.8% at 27,171.10
Nikkei 225: closed down 0.9% at 28,118.03
DJIA: closed up 104.42 points, or 0.3%, at 34,681.79
S&P 500: closed up 14.59 points, or 0.3%, at 4,358.13
Nasdaq Composite: closed marginally higher, up 1.42 points at 14,665.06
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EUR: flat at USD1.1798 (USD1.1793)
GBP: flat at USD1.3773 (USD1.3770)
USD: down at JPY110.21 (JPY110.70)
Gold: down at USD1,798.75 per ounce (USD1,801.50)
Oil (Brent): up at USD73.18 a barrel (USD73.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
1330 CEST EU ECB monetary policy meeting accounts
1100 BST Ireland consumer price index
0830 EDT US initial jobless claims
1100 EDT US EIA weekly petroleum status report
1200 EDT US monthly retail chain store sales index
1500 EDT US consumer credit
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The European Central Bank will present the results of a review of its monetary policy strategy later on Thursday. The central bank had decided at the start of last year to scrutinize "all aspects" of its monetary policy within the framework of its mandate to maintain price stability. ECB President Christine Lagarde has said a main focus of the review is whether the ECB's inflation target of "below, but close to, 2 per cent" needs to be rethought given the low inflation environment. The last such review was conducted in 2003. In the intervening years, advanced economies have seen a steady decline in inflation and rising prices are not feared as they once were. Many experts expect the central bank to aim for a 2% target in the future.
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BROKER RATING CHANGES
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BERENBERG RAISES BHP GROUP TO 'BUY' (HOLD) - PRICE TARGET 2,700 (2,200) PENCE
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PANMURE RAISES RENISHAW TO 'BUY'
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HSBC RAISES CRODA TO 'BUY' ('HOLD')
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COMPANIES - FTSE 100
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Housebuilder Persimmon said it plans to accelerate a 110 pence per share surplus capital return to shareholders following a strong first half performance. Persimmon said it performed well in the first half of 2021, with revenue beating pre-pandemic levels. Total revenue of GBP1.84 billion for the period is above both the GBP1.19 billion reported a year ago and the GBP1.75 billion registered for the same period in 2019. While the housebuilder delivered 7,406 new homes to customers in the half, below 2019's figure of 7,584, the average selling price jumped to GBP236,200 from GBP216,942. "UK housing market fundamentals remain supportive with low interest rates, improving levels of mortgage availability, ongoing government support and strong customer demand," Persimmon said. The housebuilder said it intends to return 110p per share of surplus capital as a single additional interim dividend payment in relation to the 2020 financial year. Previously, it had intended to split up the dividend into two payments, one made in August this year and one in December. However, the single 110p dividend will be paid on August 13, "accelerating and consolidating the previously indicated payments, and returning the group to distributing two capital return payments every 12 months, a year earlier than originally envisaged." There will be no further dividend payments in relation to 2020, it added.
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B&M European Value Retail said it is on track for full-year targets after growth in the first quarter of its financial year. Revenue in the 13 weeks to June 26 was up 3.1% on a constant currency basis, after a 28% jump for the same period a year ago. Core B&M UK fascia delivered two-year like-for-like sales growth of 21%, and this moderated to minus 4.4% on a one-year basis. "The group has made a strong start to the new financial year and sales remain significantly above pre-pandemic levels. As expected, trading throughout the first quarter was volatile as we annualised against the high comparatives from last year," said Chief Executive Simon Arora. The discount retailer said it is on track with its plans for the year and expects the two-year like-for-like showing from the core B&M UK business to remain strong.
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COMPANIES - FTSE 250
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WH Smith said it has been encouraged by improving trading trends as it unveiled new business wins across a number of UK airports. The books and magazines retailer said it has won places for 18 technology and accessories stores across a number of significant UK airports, including London Heathrow, Manchester and Birmingham. They will trade under the InMotion brand, its tech and accessories business in North America. The wins are expected to incur spending and investment costs of GBP15 million, though in a fully recovered travel market the stores are expected to deliver sales of GBP60 million per year. Turning to recent trading, WH Smith said revenue in the first quarter represents 59% of 2019 levels, unchanged in the second quarter at 58% - though improving to 62% in the 18 weeks to July 3, driven by the travel business. The retailer highlighted its North American performance, where the business has continued its encouraging recovery, with recent sales, in June, at 88% of 2019 levels. "Following the stronger than anticipated performance from our North America business, we anticipate a small improvement to management's expectations for the current financial year," said WH Smith.
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Thursday's Shareholder Meetings
Active Energy Group PLC - AGM
Air Partner PLC - AGM
Augmentum Fintech PLC - GM - re investing policy change and share issue
Calculus VCT PLC - AGM
First Derivatives PLC - AGM
Great Portland Estates PLC - AGM
Land Securities Group PLC - AGM
Pets at Home Group PLC - AGM
Severn Trent PLC - AGM
Templeton Emerging Markets IT PLC - AGM
Worldwide Healthcare Trust PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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