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Thu 16th Mar 2023 - Update: Deliveroo FY update, Chick-Fil-A plans another international play, Tim Martin, Sexy Fish
Deliveroo making “excellent progress on path to profitability”: Deliveroo has said that its revenue increased and its pre-tax loss narrowed in 2022, as it optimised consumer fees, made efficiency gains in the rider network and efficiently targeted marketing spend, but growth in Q1 “expected to be broadly flat”. The company reported a pre-tax loss of £230.6m in 2022 against a loss of £281.8m in 2021. It said it had made “excellent progress on path to profitability”, delivering positive adjusted Ebitda in H2 2022 at £6.6m compared to (£84.6m) in H2 2021 – “significantly ahead of expectations”. It also reported a “good year of growth in challenging market conditions” with gross profit up 30% to £643.2m, revenue up 14% to £1.974bn and gross transaction value (GTV) up 9% year-on-year to £6.848bn. Adjusted Ebitda loss for the year was £45m compared with an adjusted Ebitda loss of £100.0m in 2021. The business said it continued to make market share gains in the UK and Ireland and in key international markets such as France and Italy. Deliveroo said its average monthly active consumers grew by 6% year-on-year, averaging 7.4 million across 2022 compared to 7.0 million in 2021. The Q4 2022 average of 7.4 million represents a decline of 1% year-on-year versus Q4 2021, which it said reflected “the challenging macroeconomic environment in 2022”. It said that average order frequency throughout 2022 remained stable compared to 2021, at 3.4 times per month. The company said that three factors drove the majority of this profitability progression in 2022. It said: “First, we took steps to optimise consumer fees, such as ensuring delivery fees appropriately reflect delivery distance and adjusting the balance between delivery fees and service fees. Second, we continued to drive efficiency in our logistics network, through initiatives to further reduce rider wait time at restaurants, to better balance supply and demand in the network, and to capture efficiencies from order stacking without degrading the consumer experience. Third, we made adjustments during the year to optimise marketing spend, resulting in lower marketing expense in H2 than H1. Importantly, we continued to invest in our consumer proposition at the same time.” The company said that its GTV growth this year is anticipated to be low- to mid- single digits. It said: “Growth in Q1 expected to be broadly flat, with growth improving through the year as we continue to deliver on our plans and the comparison base eases. 2023 adjusted Ebitda expected to continue to improve and to be in the range of £20-50m, weighted to H2.” Will Shu, founder and chief executive of Deliveroo, said: “I’m proud of our performance in the past 12 months. Our team has delivered in difficult market conditions, with continued growth and share gains in our key markets. I’m particularly pleased that the company reached adjusted Ebitda profitability in the second half of last year. This is a significant step on our path to sustainable cash generation, and we achieved this milestone a year earlier than our guidance by executing our strategy successfully despite headwinds from the market environment. The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth. I want to thank the whole Deliveroo team and our consumers, riders and merchants for their ongoing commitment and I look forward to more progress together in 2023.”

Latest Who’s Who of UK Food and Beverage to feature 42 updated entries and seven new companies, released tomorrow: The latest Who’s Who of UK Food and Beverage will feature 42 updated entries and seven new companies when it is released to Premium subscribers tomorrow (Friday, 17 March). This month’s edition includes 654 companies and more than 170,000 words of content. The companies, listed in alphabetical order, have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database, which will be updated monthly, merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database; the Propel Turnover & Profits Blue Book; and the UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Chick-fil-A to another attempt to crack the international market with a $1bn investment: US fast food brand Chick-fil-A is reportedly planning to invest $1bn to open restaurants in Europe and Asia, following an unsuccessful foray in the UK three years ago. The company said it plans to open restaurants in Europe and Asia by 2026, with locations in five international markets by 2030. Andrew Cathy, the company’s chief executive, told the Wall Street Journal that Chick-fil-A has plenty of room to grow in the US, but that an international presence is necessary as the family-owned business charts its future. He said: “We feel like it’s time to continue to innovate and try and test how we will do in international markets so that we can learn.” In 2020, the chain, which has 2,700 restaurants in the US, closed its UK locations – in Reading and inside the Macdonald Aviemore Resort in the Scottish Highlands – just six months after opening, amid protests over its history of donating to anti-LGBTQ political causes. Chick-fil-A said it no longer contributes to political causes.

Martin – Any reduction in the tax disparity between pubs and supermarkets is welcome: Tim Martin, the chairman of JD Wetherspoon welcomed the freezing of duty on beer in yesterday’s Budget, but added that more needs to be done to close the gap in tax on pubs versus supermarkets. Martin has spent years campaigning to reduce tax disparity between pubs and supermarkets, previously arguing that the difference is the biggest threat to the hospitality industry. He said: “Any reduction in the tax disparity between pubs and supermarkets is welcome. We have been campaigning for tax equality for a long time. This gesture by the government is a tacit acknowledgement that something needs to be done. We will investigate how much of the tax disparity remains after this move. We retain our view that anything less than equality is an unsustainable distortion and is economically counterproductive.”

Caring confirms plans to open Sexy Fish in Manchester this year: Serial sector investor Richard Caring has confirmed plans he will open a site under his high-end Sexy Fish concept in Manchester, this year. The new restaurant, from the group behind The Ivy chain of restaurants, Caprice Holdings, will open in Spinningfields, where Armani previously operated a 15,000 square-foot store. Sexy Fish’s original Mayfair location opened in 2015, with a further site subsequently opening in Miami two years ago. The company said: “With iconic locations in London’s Mayfair and Miami’s glittering Brickell district, we are delighted to introduce Sexy Fish’s third sister restaurant in 2023, situated in the heart of Spinningfields. With our high-end glamour, surrealist décor, and opulent culinary majesty inspired by the oceans of Asia, Sexy Fish will also offer an exclusive late-night experience, allowing guests to enjoy incredible entertainment, as well as food and drink options, until the early hours.”

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