DELIVEROO: WAITING FOR PROFIT DELIVERY (1020 EST/1520 GMT)
For all the interest generated by the incoming London Deliveroo IPO and its expected $7 billion price tag, there's also a fair amount of doubts on how soon the company can start delivering profits to would-be shareholders.
"Lockdowns kept people at home for months at a time and online grocery slots were hard to come by, so demand for takeaways shot up. A cynic might ask, if Deliveroo couldn't deliver a profit against that backdrop, when will it?", asks Russ Mould at AJ Bell.
Deliveroo was still operating at an underlying loss of 223.7 million pounds ($308.93 million) in 2020, down from 317.3 million pounds in 2019.
While many investors won't be turned off by a lack of profits, HSBC analysts point out that the disappointing quarterly results of U.S. peer Doordash in February signal that the end of lockdowns might prove to be somewhat challenging times.
"Delivery focused players could experience a much more severe normalisation in demand", HSBC analysts commented.
The delivery company will face a double whammy with some consumers switching to eating in and restaurants being more reluctant to accept costly delivery fees.
"If we do see lockdown restrictions start to get eased as we head into the summer months, how many restaurants will be happy to pay up to 30% commission if they are able to start opening their doors again as the weather starts to get warmer", asked Michael Hewson at CMC Markets.
Also, competition is harsh, with UberEats and Just Eat Takeaway fighting for market dominance so spending money to make money seems very on the agenda.