Just Eat 2

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Just Eat Takeaway has sunk to a €3.5bn (£2.9bn) loss in the first half after writing down the value of its embattled Grubhub service in the US, but the food delivery firm said it was making “significant progress” towards profitability.

Orders in the six months to the end of June fell 7% year on year to 509.4 million as the company struggled to keep up with the record demand experienced in 2021 during the height of the pandemic.

However, Just Eat boosted first-half revenues 7% to €2.8bn as rising prices pushed up higher average transaction values to offset the fall in orders. Gross transaction value for the period was flat at €14.2bn as a result.

Adjusted EBITDA improved in the period, with a loss of €134m - 29% lower than a year ago. Just Eat said the year-on-year and sequential improvement “clearly demonstrates the path to profitability”.

However, a goodwill impairment of €3bn related to Grubhub pushed the group to a €3.5bn loss for the half. Excluding the write down, losses amounted to €500m, compared to €486m in the first half of 2021.

Last month, Just Eat announced it had sold a 2% stake in Grubhub to Amazon, with options to offload another 11% if the partnership in the US with the tech giant goes well.

Just Eat is also exploring a full sale of Grubhub in an effort to strengthen its balance sheet after bowing to mounting investor pressure as the performance at the business - acquired for €7.3bn during the pandemic delivery boom - stuttered.

Shares in Just Eat have lost 75% of their value over the past year as part of a wider tech sell-off as markets lost confidence in the ability of these cash-intensive businesses to turn a profit.

CEO Jitse Groen said today: “After a period of exceptional growth, Just Eat Takeaway.com is now two times larger than it was pre-pandemic.

“Whilst this growth required significant investment, we have continued to focus on executing our strategy to build and operate highly profitable food delivery businesses.

“Our three largest segments, representing 90% of our gross transaction value, were adjusted EBITDA positive in the second quarter of 2022.

“Our path to profitability is accelerating and we expect to continue to materially improve our adjusted EBITDA in the second half of this year and to be adjusted EBITDA positive at a group level in 2023.”

In the UK and Ireland, Just Eat recorded a 7% fall in orders in the first half to 132.1 million, with revenues up 13% to €658m and GTV nudging 1% higher to €3.3bn thanks to rising prices and currency movements.

Shares in the group jumped 2.7% to 1,605.5p this morning.

Morning update

Just Eat Takeway also announced COO Jörg Gerbig has been reappointed to its management board following a three-month investigation into his behaviour at a company social event.

The company initiated an investigation into Gerbig in May after a formal complaint was made under its ‘Speak Up’ policy.

“The external expert investigation has now been concluded and based on the outcome Jörg Gerbig can continue in his position as COO,” the group said in a statement to the London Stock Exchange.

Elsewhere, it’s a quieter morning on the markets in terms of company announcements.

The FTSE 100 dipped 0.4% to 7,380.75pts.

Early risers included Delivery Hero, up 3.7% to €49.75, Parsley Box, up 2.2% to 11p, Nichols, up 1.6% to 1,188.6p, and PayPoint, up 1.5% to 609p.

Fallers so far included Pets at Home, down 2% to 323p, B&M European Value Retail, down 1.4% to 424.9p, Imperial Brands, down 1.3% to 1,805p, and Sainsbury’s, down 1.3% to 217.9p.

Yesterday in the City

The FTSE 100 dipped into the red yesterday, falling 0.1% to 7,409.11pts.

Investors were unperturbed by stalling profits at Greggs, with shares up 2.6% to 2,132p as it reported 27.1% jump in first half sales.

Irn-Bru owner AG Barr nudged 0.6% higher to 546p despite a strong showing in the first half, with a double-digit rise in sales.

Domino’s Pizza Group sank 6.1% to 273.2p as it revealed underlying profit before tax declined £9.9m to £50.9m in the first half.

Sausage casing manufacturer Devro also fell 2.8% to 182p as first-half underlying operating profit fell back 8.4% to £18.6m.

Over in the US, shares in Oatly crashed 17% to $3.24 after the group significantly downgraded full-year growth expectations.

Elsewhere, risers included Bakkavor, Haleon and Kerry Group, up 4.4% to 96p, 4.3% to 310.5p and 2.7% to 105.5p respectively.

The big fallers included Vimto owner Nichols, down 6% to 1,170p, Fever-Tree, down 6.5% to 1,010p, Science in Sport, down 6.4% to 29p, THG, down 5.2% to 66p, and Parsley Box, down 2,2% to 11p