Deliveroo has flagged a £223.7m underlying loss during 2020 while officially firing the starting gun on its London stock market flotation.
The restaurant and grocery delivery app gave prospective investors a glimpse of its financial performance as it formally confirmed its intention to launch an Initial Public Offering (IPO).
Details of the listing, including its plans to make use of a proposed dual-class share structure that will give co-founder and CEO Will Shu more control over the company, had been previously revealed.
Its trading update showed a surge in demand for its online platform during the COVID-19 crisis as dine-in restaurants were forced to close, with the number of transactions hitting a value of £4.1bn last year – a rise of 64% on 2019.
The company reported more than six million people order each month through the 115,000 restaurants, cafes and stores on its platform.
While underlying gross profit almost doubled to £357.5m the total underlying loss for the year, at £223.7m, was significantly down on the £317.3m recorded in 2019.
The company declined to put a figure on the value it was likely to seek when the share sale takes place.
Market analysts estimate it could come in between £6bn and £8bn – with the range largely reflecting recent stock market volatility globally that has hit tech stocks in particular.
Amazon-backed Deliveroo had confirmed on Sunday that it was to offer customers a slice of the action while it also planned to distribute a £50m funding pot to restaurants, riders and community groups on the day of its listing.
Mr Shu said: “Now we take the next big step in our journey by allowing everyone to have a share in our future.
“That’s why we are planning to take Deliveroo public here in London, the city where it all started – and we plan to offer our customers across the UK the chance to own a part of the business.
“We are proud to be enabling our customers to participate in a future float and have the chance to buy shares.”
It confirmed that a planned US-style dual-class share structure – set to be formally given the green light under a shake-up of rules that aim to make London’s stock markets more attractive to entrepreneurs – would last for the first three years of the listing.
It would initially give Mr Shu 20 votes per share and provide all other shareholders with one vote per share.
AJ Bell investment director, Russ Mould, said of the company’s statement: “After the fanfare of how Deliveroo is going to reward drivers with bonuses and give customers a chance to buy the shares, here comes the hard facts.
“The most important point is how the company remains loss-making despite experiencing a surge in business going through its platform during the pandemic.”
He added: “This goes to show that delivering food is not a quick win. It’s about building scale and there are several other firms running the same race.
“Deliveroo says it will continue to invest in its business which could impact profitability. It has no choice as rivals are doing the same.
“At some point down the line, it will have to start delivering that magic profit or investors will lose interest.”