On Wednesday, Deliveroo (LON:ROO) shares jumped at the open but failed to hold their gains after the food delivery company said it would stop its loss-making efforts to capture the Australian market.

The company communicated that it is unlikely to reach a profitable and sustainable scale in Australia with considerable financial investment. The expected return is different from the company’s risk/reward thresholds.

In the first half of 2022, losses in Australia had shaved some 30 BP (basis points) off the company’s basic operating margins while accounting for only 3 per cent of GTV (gross transaction value).

Earlier, the food delivery company said GTV ((gross transaction value)) growth would be in the lower half of its forecast range of 4-12 per cent. The company expects loss before interest, taxes, depreciation, and amortisation to be at the narrower end of its forecast range.

The company’s GTV is being flattered by the high inflation in its UK market. The expected GTV gain of 4-8 per cent is below the inflation rate, which touched 11.1 per cent in October.

By 03:30 ET (08:30 GMT), shares in London were down 1.2 per cent.