Next boss Lord Simon Wolfson has left the board of nationwide takeaway delivery business Deliveroo saying he no longer had enough time to support it.
The departure was announced as Deliveroo revealed that pre-tax losses were growing because cash-strapped customers were cutting back on food deliveries.
Lord Wolfson is the longest-standing boss at a FTSE 100 business having been chief executive at Leicestershire-headquartered Next since May 2001. He joined the Deliveroo board as a non-executive director 18 months ago in the run up to its stock market listing in spring, 2021.
He said: “After much consideration, and with regret, I believe that the time required to continue in my role at Deliveroo is no longer compatible with my executive and other commitments.”
Deliveroo posted a pre-tax loss of £147.3 million for the first half of 2022, against losses of £95.4 million a year earlier, just weeks after slashing its annual outlook on the back of slumping sales growth.
The food delivery giant also announced plans to pull out of the Netherlands, which it said accounted for just 1 per cent of sales by gross transaction value (GTV).
Despite that, it notched up half-year revenues of more than £1 billion for the first time, with turnover 12 per cent higher year-on-year.
Last month it downgraded its guidance as it said the slowdown will affect sales over the full year, forecasting annual sales growth of between 4 per cent and 12 per cent, down markedly from the previous 15 per cent to 25 per cent guidance.
Will Shu, founder and chief executive of Deliveroo, said: “We have made good progress delivering on our profitability plan despite increased consumer headwinds and slowing growth during the period.
“We are confident that in the second half of 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives.”
Danni Hewson, financial analyst at online stockbroker AJ Bell, said: “Investors have become very nervous about tech stocks this year, for fear that high rates of growth may become harder to achieve. Cracks have been appearing in a range of areas, from online advertising to component shortages, affecting businesses and knocking them off course.
“It’s therefore a pleasant surprise to see Deliveroo beat estimates, as it looked to be a prime candidate to serve up bad news. After all, if consumers are under increasing financial pressure, cutting back on a takeaway meals is an easy win and that would feed through to lower activity for Deliveroo.
“If you dig deeper into its latest results, there are still reasons to be cautious, however. Growth has slowed in the past quarter and the principal reason it managed to beat estimates was by cutting back on marketing spend. That might explain why the share price didn’t rally on the news.”
