Delivery Hero shares plunged after the company predicted disappointing profit margins amid investor scepticism about unprofitable companies promising fast growth.
The food delivery group said gross merchandise value (GMV) sales rose 39% to €9.6bn in the fourth quarter and predicted its platform business would break even on an adjusted earnings basis in 2022.
Annual GMV rose 62% to €35.4bn, slightly better than the company’s guidance, while revenues soared 89% to €6.6bn.
But investors were unnerved by guidance for the German company’s profitability. Delivery Hero said its earnings/GMV margin would be about -1 to -1.2% in 2022.
Delivery Hero shares fell 30.2% to €46.71 at 11:07 GMT – the lowest price since December 2019. Rivals Just Eat Takeaway and Deliveroo fell 5.2% and 2.9% respectively.
Investors are growing more wary of companies promising to use technology to grow rapidly with profitability a distant prospect. Delivery Hero shares have lost more than 60% in the past year.
“With steady growth rates and an increasing contribution margin of own-delivery, it is clear that our business model works. Our deliberate focus on scale and driving efficiency pays off, and we expect our platform business to generate a positive adjusted Ebitda this year.”
