Will Shu, the CEO of Deliveroo, has recently sold 9.4 million shares valued at £14.8 million. This sale was primarily aimed at funding his personal property investments.
Despite this significant sale, Shu still holds 95.8 million shares in the company. This move follows Deliveroo’s achievement of its first profit and comes alongside a newly announced £150 million share buyback.
Will Shu’s Share Sale
Between September 12 and September 16, Will Shu sold 9.4 million shares of the company, amounting to approximately £14.8 million. This substantial share sale was undertaken to fund his personal property investments. Despite this transaction, Shu retains a significant stake, holding 95.8 million shares in the company.
It is noteworthy that Shu does not participate in Deliveroo’s annual bonuses or long-term share award schemes. This decision to sell shares follows a notable milestone for Deliveroo—achieving its first profit since going public. The company also recently announced a £150 million share buyback, further underlining its positive financial trajectory.
Deliveroo’s Financial Turnaround
Deliveroo’s financial performance has shown remarkable improvement. Over the past year, the company’s share price has surged by nearly 30%, reflecting increasing investor confidence. For the six months ending in June, Deliveroo reported a profit of £1.3 million. This is a significant turnaround from the £82.9 million loss reported during the same period the previous year.
The volume of orders saw an uptick of 2%, reaching 147 million, while the gross transaction value increased by 5% to £3.69 billion. Easing food prices and a stabilising cost of living have played a critical role in boosting demand.
Deliveroo’s Foundation and Growth
Founded in London in 2013, Deliveroo originated from humble beginnings with Will Shu, a former banker, personally delivering pizzas to friends.
Today, it operates in ten markets worldwide and employs around 140,000 delivery riders. Additionally, Deliveroo has forged partnerships with approximately 180,000 restaurants, significantly expanding its reach.
The company has faced numerous challenges since going public. Its high-profile initial public offering in April 2021, valued at £7.6 billion, saw a 30% drop in share price on its first trading day due to concerns over its business model and the legal status of its riders.
Pandemic Performance and Challenges
The COVID-19 pandemic initially proved beneficial for Deliveroo, with hospitality venues closed, leading to a surge in orders. However, as the cost of living crisis emerged, the company faced a decline in demand for its services.
To address these challenges and diversify its offerings, Deliveroo has expanded into non-food products. A recent partnership with a home improvement retailer to deliver products within London in as little as 25 minutes exemplifies this strategic shift.
Impact of the Share Sale on Company Stock
Despite Will Shu’s significant share sale, Deliveroo’s stock remained stable. The share price closed slightly up by ½p, or 0.25%, at 157¼p.
This stability suggests that investors have retained confidence in Deliveroo’s strategic direction and financial health. The company’s continued focus on expanding its market presence and maintaining profitability seems to resonate positively with shareholders.
As Deliveroo continues to grow and evolve, close attention will be paid to how it navigates expansion and sustains its profitability in a competitive landscape.
Future Prospects and Market Outlook
Deliveroo’s future appears promising, with strategic initiatives aimed at enhancing growth and profitability. The company’s diversification into non-food products and plans for further expansion into new markets indicate a forward-thinking approach.
Investors and market analysts will be closely watching Deliveroo’s performance to gauge its ability to maintain the momentum and leverage its strengths in a dynamic and competitive market environment.
Will Shu’s sale of shares to invest in personal property highlights his substantial commitment to Deliveroo, even as the company celebrates its first profit.
The stability in Deliveroo’s stock price post-sale reflects strong investor confidence in the company’s strategic direction and future prospects.
