Meal delivery group close to sustainable breakeven
Will return 250 million pounds to shareholders
Shares rise 4

LONDON, Aug 10 Reuters Britain39;s Deliveroo lifted its earnings guidance sharply on Thursday after it improved its algorithm to deliver meals and groceries more efficiently, sending its shares up 4.

Founder and Chief Executive Will Shu said Deliveroo had made a lot of progress on improving its earnings in challenging market conditions that saw total order numbers drop by 6 in the first half.

The group, which has 162,000 restaurants and 20,000 grocery sites on its platform, reported adjusted earnings before interest, tax, depreciation and amortisation EBITDA of 39.4 million pounds 50.27 million, reversing a 51.6 million pound loss a year earlier.

Its operating margin rose to 1.1, from 0.2 in the second half of 2022 and a negative margin of 1.5 a year ago.

More efficient delivery had also reduced customer complaints and cut refunds, Shu said.

Deliveroo increased its fullyear EBITDA forecast to 6080 million pounds 76102 million, from 2050 million pounds.

Shu said the group, which competes with Just Eat Takeaway.com and Uber Eats in markets in Europe, the Middle East and Asia, was also moving closer to its goal of generating positive free cash flow.

I wouldn39;t say we39;re sustainably there yet, but we39;re pretty close, he told Reuters in an interview.

He said with cash generation on the horizon and around 1 billion pounds on its balance sheet, the…