Delivery Hero Shares Surge

Shares of Delivery Hero (DHER.DE, DHER.F, DLVHF), an online food-delivery service, jumped as the firm raised its sales guidance for fiscal 2019 following an increase in new clients and a plan to “opportunistically” invest 100 million euros ($112.1 million).

Lifting its sales forecast by 200 million euros to between 1.3 billion euros and 1.4 billion euros, a growth of nearly 100% year-on-year, the Berlin, Germany-based firm said in an update late on Wednesday that trading in the first two months of the fiscal second quarter had “exceeded expectations.”

“Outperformance has been driven by an expansion in the food delivery markets along with improvements in product, restaurant coverage, and expansion of own-delivery capabilities,” the company said in a statement. “This is particularly the case in Asia with higher than expected order growth levels.”

Given that adjusted earnings before interest, tax, depreciation, and amortization for the first five months of 2019 was “in line” with guidance, Delivery Hero is planning to “opportunistically” invest up to an additional 100 million euros in the second half to grow the business.

It said these investments would be focused on new customer acquisitions, taking advantage of the flat-to-lower acquisition costs as well as early-stage and rapidly expanding markets, particularly in Asia and the Americas.

These investments are expected to lift sales by up to 20 million euros during the current year and 50 million euros in the next, the firm noted. The anticipated revenue jump is, however, already factored into the updated sales guidance, it added.

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