On Friday, shares in Deliveroo Holdings PLC (LON:ROO) climbed after the food delivery service upgraded its guidance for a full-year core income margin. The UK-based company expects adjusted earnings before interest, tax, depreciation and amortisation margin to slide by between 1.2 per cent – 1.5 per cent.

According to analysts, a return in the midpoint of that range means a core earnings loss of about £95M. Deliveroo said the decision originated from continued gross profit margin expansion and lower expenditure on marketing.

The company said it has been adapting to the operating environment and driving forward on its path to profitability. It now expects the H2 2022 adjusted EBITDA margin to be better than the previous guidance.

Despite the upgrade, the firm warned that annual gross transaction value (GTV) growth would now remain at 4 per cent – 8 per cent, which would be at the lower end of its earlier target of 4 per cent – 12 per cent. The company cited the impact of rising living costs leading households to cut back on spending like takeaway meals.

These inflationary pressures and the effects of summer in European markets also caused Q3 GTV to contract 5 per cent versus the prior three-month period.

Deliveroo shares are down by more than 72 per cent over the past one-year period.