Even the delivery of jam today and the promise of more tomorrow, or at least later in the year, failed to lift the mood and share price at Just Eat Takeaway.com.
Europe’s biggest food delivery group reported a huge jump in underlying earnings before deductions from €19 million in 2022 to €324 million, slightly ahead of its previous forecasts. It reached the “significant milestone” of being free-cashflow-positive in the second half.
It also predicted a 40 per cent jump in profit this year and held out the possibility of another share buyback to follow one of €150 million that ends in September. Yet although Jitse Groen, the chief executive, said he would look carefully at whether there was scope for an additional buyback, his failure to confirm a programme extended a recent decline in Just Eat’s share price. The stock, down by a third over the past 12 months, fell by a further 28p, or 2.2 per cent, to close at £12.56.
Just Eat boosted its 2024 prediction for underlying profit to €450 million amid an apparent increase in orders via apps and the addition of grocery and retail products.
Groen, 45, said the competitive environment in northern Europe seemed to be improving in the group’s favour, adding that there were still “plenty of irrational competitors”.
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The company expects its gross transaction value, the total value of all goods sold, to increase by between 2 per cent and 6 per cent in the coming year, although that excludes North America, where it is trying to find buyers for some, or all, of its Grubhub business. Groen said it was “not an easy M&A environment” in America, where fee caps — curbs in some states on what can be charged for deliveries — cost the company $100 million a year.
In its UK and Ireland division, Just Eat’s profits rose from €23 million to €135 million, thanks largely to an improvement in delivery efficiency and a simplification of its operations. It also moved from an employment model to a contractor model for deliveries.
Just Eat said that a margin increase from 0.4 per cent of gross transaction value to 2 per cent meant that the UK and Ireland business was “rapidly approaching a similarly high adjusted [pre-tax profit] margin as northern Europe”.
The number of orders in the UK and Ireland was down by 6 per cent to 245 million, with the gross transaction value up 1 per cent to €6.6 billion. Overall, the company raised the number of its partners by 1 per cent to 699,000, while the number of active consumers fell by 6 per cent to 84 million. Average monthly order frequency was flat.
Total orders fell by 9 per cent to 891 million, while the gross transaction value, including North America, fell by 6 per cent, or 4 per cent at constant currency rates, to $26.4 billion.
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Just Eat, formed four years ago from the merger of Just Eat and Takeaway.com, its Dutch rival, has its headquarters in Amsterdam and operates in countries including Germany, Canada, Australia, France, Spain and Israel. The company had a net loss after tax of €1.85 billion in 2023 after booking a €1.06 billion impairment against its American business.
