Just Eat hails record year despite swinging into the red
A £180 million hit on its Australian and New Zealand arm saw the group slump to a £76 million pre-tax loss in 2017.
Online takeaway delivery firm Just Eat has swung to a loss in 2017 after taking a mammoth hit on its Australian and New Zealand business, but cheered a record surge in orders.
The group – recently promoted to the FTSE 100 Index – slumped to a £76 million pre-tax loss last year against profits of £91.3 million in 2016 after taking a £180.4 million charge on the acquisition of its Australian and New Zealand arm.
Just Eat said with the hit stripped out, it would have made a profit of £104.4 million.
It posted underlying earnings of £164 million – up 42% on 2016 – and forecast this to grow further in 2018, to between £165 million and £185 million.
Just Eat shares were 11% lower, having tumbled as much as 15% at one stage after its earnings forecast missed expectations and as investors fretted over the cost of its plans to invest heavily in delivery.
2017 was a record year for Just Eat. We helped 21.5 million customers order 172 million takeaways around the world. Peter Plumb, Just Eat chief executive
Recently appointed chief executive Peter Plumb – the former Moneysupermarket.com boss who took the helm last September – said he planned to step up investment across the UK and its overseas markets.
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He said: “2017 was a record year for Just Eat. We helped 21.5 million customers order 172 million takeaways around the world, growing group revenue by 45% to £546 million.”
He added: “As the new CEO, I will be increasing our investment in brand, developing markets and delivery services that will be engineered to complement our thriving marketplace business by bringing more choice to our takeaway-loving customers.”
But the group cautioned competition was “intensifying” across some of its markets, such as Australia and New Zealand.
In the UK, where it recently snapped up rival Hungryhouse after being given the all-clear by competition watchdogs, underlying earnings lifted 28% to £155.4 million for 2017 after sales also jumped 28%.
Helped by its sponsorship of the X Factor and recent marketing push, UK orders increased 19% to 105 million and the group said it delivered a record-breaking performance in December with more than 10 million orders in the month.
Active UK customer numbers rose 14% to 10.5 million, while 85% of orders were made on mobiles and tablets, up from 80% in 2016.
The results come after Just Eat joined the FTSE 100 top tier in December just three years after its stock market debut.
Analysts at Numis Securities said that they were not yet “comfortable with the economics of the delivery model”, but added Just Eat management saw it as an opportunity to capture a greater market share and fend off competition.