- Both companies are pursuing scale before they try to turn a profit
- Deliveroo’s value has benefited from Delivery Hero taking a £300m stake in it
Anecdotally, we knew that much of the developed world spent most of lockdown on the sofa, watching TV and eating takeaways. Just Eat Takeaway (JET) and Deliveroo (ROO) have provided more evidence of this with their recent half-year results. JET’s total revenue was up 52 per cent to €2.6bn (£2.2bn) while Deliveroo saw sales jump 82 per cent to £922.5m.
The surge in demand was driven by government enforced lockdowns, but both companies were keen to focus on “consumer engagement after re-opening” and post-pandemic prospects. Delivery companies know their investment cases reside on customers permanently changing their relationship with food delivery. Beyond debates about what proportion of recent growth represents a Covid bump and how much reflects long-term trends, perhaps the biggest question for investors is how profitable these businesses could ultimately be? That’s presuming they can turn a profit at all.