(Bloomberg) -- Deliveroo Plc’s orders grew faster than expected in the fourth quarter, driving the firm to hit the top end of its full-year guidance and providing a lift after the stock languished since going public last year. Shares in the company gained as much as 6.1% in London on Thursday, the most since August.
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Food delivery companies have been struggling to grapple with the end of the pandemic, with customers returning to work and regulators prepping new rules for gig economy workers.
“We’re really pleased with how we performed vis-a-vis year-on-year versus a very restricted period a year ago,” Deliveroo Chief Executive Officer Will Shu said in an interview.
Read more: Deliveroo Jumps Most in Five Months as Growth Tops Estimates
Shu added that the company now had three small fulfillment centers in London for its new rapid grocery offering and that “the consumer adoption, the retention, the frequency is really off the charts.”
Full-year gross transaction value rose 70% year-on-year in constant currency, the edge of the previously projected 60% to 70% range, the London-based food delivery company said in a statement Thursday. Fourth-quarter GTV gained 36% to 1.7 billion pounds ($2.3 billion), while analysts surveyed by Bloomberg had expected gains of 28.3%.
U.K. and Ireland led the company’s performance, with the value of transactions rising 71% across 2021, as the firm said it gained U.K. market share. In the international segment, orders gained 74% but outpaced transaction value as the average order size decreased.
Addressing new rules from the European Commission that could impact millions of gig economy workers, Shu told analysts on a conference call that he generally viewed the proposals positively and that they put Europe on a path to further clarity.
Orders in the past quarter were 80.8 million -- a sequential gain of 10% -- while GTV per order rose 1% in constant currency to 21.4 pounds.
The company confirmed its full-year guidance for gross profit margins of 7.5% to 7.75% as a ratio of transaction value.
On-demand grocery gained to represent 8% of GTV in second-half 2021, up from 7% in the first half.
Shu said there was interest globally for its rapid grocery offering from partners.
In October, Deliveroo raised projections for 2021 growth in a bet that diners would continue to order meals to their home amid a reopening of economies.
Amid recent acquisitions by other food delivery companies, Shu said “the industry is still pretty early in its maturity if you look at online penetration.”
Competitor Just Eat Takeaway.com NV saw order growth slow on its platform in the fourth quarter, as it launches a trial partnership with U.K. grocer Asda Group Ltd.
The company will report full-year 2021 results on March 17.
Deliveroo shares rose as much as 6.1% at the start of trading Thursday and were up 3.1% at 10:24 a.m. in London. They’ve fallen more than 50% since the market debut last March.
Jefferies analyst Giles Thorne said in a note Thursday that “The absence of 2022 guidance means we can’t yet frame near-term growth and profitability expectations. For a tape for online food delivery names, and a weak performance into the print, we see cause for a bump in the equity today.”
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(Updates 7th paragraph with commentary from analyst call, shares)
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