Deliveroo PLC (LSE:ROO) reached breakeven in the second half of the fiscal year and predicted that its full-year earnings will be ahead of previous guidance.
The food delivery group was updating investors on trading and said the improved picture was driven by gross profit margin expansion and cost control.
As a result, the company's full-year adjusted EBITDA margin (as a percentage of gross transaction value - GTV) is now expected to be around -1%, better than previous guidance of -1.2% to -1.5%.
In the second half of the year adjusted EBITDA was approximately breakeven, a significant improvement in adjusted EBITDA margin (as a percentage of GTV) from -3.2% in the previous year.
Further improvements in earnings are expected in 2023 with the company set to issue guidance in March alongside its fiscal year 2022 results.
The group said it delivered a solid year of growth in 2022, with GTV up 7% for continuing operations (excluding Australia and the Netherlands) and 5% for all operations (both in constant currency) - within the guidance range of 4-8% growth (in constant currency).
In quarter four, GTV for continuing operations was £1,795mln, up 9% (6% in constant currency) year-on-year.
Orders declined by 2% year-on-year, although this was more than offset by year-on-year growth in GTV per order of 11% (8% in constant currency), driven by item-level price inflation and optimisation of consumer fees during 2022.
In a statement, Will Shu, founder and CEO of Deliveroo, said: "Amidst an uncertain outlook for 2023, we remain confident in our ability to adapt financially and to make continued progress on our path to profitability."