Deliveroo plans to return a further £250mn to shareholders, after losses halved in the first half of the year.

“The company fundamentally is at a very different place to when we went public 30 months ago,” said Will Shu, Deliveroo’s Founder and Chief Executive shared with Financial Times. “We are basically free cash flow break-even at this point.”

Deliveroo reported that pre-tax losses narrowed from £127.1mn in the first half of last year to £57.6mn in the first six months of 2023. Revenue rose 5% to £1bn, thanks to a 10% increase in customer spending per order to an average of £24.20, driven partly by inflation. Order volumes, however, fell 6% to 145.2mn.

Deliveroo cut its annual forecast for gross transaction value, a measure of customers’ total spending on its app as well as other fees, to “lower single digits” percentage growth, but raised its guidance for adjusted earnings for 2023 from £20mn-£50mn to £60mn-80mn.

The stock is still trading well below Deliveroo’s initial public offering price of 390p. However, the stock this year has risen more than 40% as profitability comes within reach.

“We feel very confident in our position,” said Shu.

Deliveroo had previously announced a £50mn share purchase programme in March, after completing a £75mn buyback scheme in January. The extra £250mn will be returned to shareholders through a special dividend, share buybacks or a tender offer, Shu said, pending consultation with shareholders.

“We have ample cash on the balance sheet for growth and unforeseen circumstances,” said Shu to Financial Times, with net cash of £948mn at the end of the first half, so it was “time to give this back to shareholders”.

Shu said that the move reflected investors expectations for a much faster return from equities now that interest rates have risen.

Deliveroo this year plans to set out its longer-term vision for investors, which Shu said would include a push into “adjacent verticals”, after recent moves to deliver groceries and non-food items.