The Deliveroo share price (LON: ROO) looked to continue to pedal back to its IPO price as the online food delivery company provided an upbeat update to the market as increased its gross transaction value guidance for the full year.
As part of its second quarter update, ROO revealed that it had seen good growth across the first half of the year, so much so that it is increasing expectations for the second half of the year.
This will translate into a forecast of gross transaction value growth of between 50 to 60 percent rather than the 30 to 40 percent previously forecast.
However, an increase in investment to support growth looks set to limit its gross profit margin:
“Deliveroo sees an opportunity to make further discretionary investments into growth opportunities in the second half, and as a result of accelerating these investments in H2, along with an expectation that AOV reverts towards pre-COVID levels, we are confirming our full year gross profit margin guidance (as a % of GTV) and expect it to be in the lower half of our previously communicated range.”Q2 Trading and Guidance Update
Investors will be closely following the build-up to its first half results which are due on 11 August.
The ROO share price has rebounded strongly since slipping way below to its IPO price over 390p – dipping to below 230p and now currently at 313p.