Just Eat revenue jumps as company targets £1bn sales
The online food delivery service is under intense pressure from shareholder Cat Rock.
Just Eat has reported a jump in annual revenue and profit as the online food firm targets £1 billion in sales this year for the first time.
The group saw revenue grow 43% in 2018 to £779.5 million, boosted by strong growth in the UK and Canada.
Underlying earnings rose 6% to £173.9 million in the year to December 31, while pre-tax profits came in at £101.7 million, compared with a £76 million loss in 2017.
UK orders were up 17% and sales increased by 27%, aided by the successful integration of HungryHouse.
In Canada, where it operates SkipTheDishes, revenue soared 186% at constant currency with the launch of multilingual capabilities.
We are creating a leading hybrid offering founded on our unrivalled marketplace, combined with the targeted roll-out of delivery Peter Duffy, Just Eat
Interim boss Peter Duffy said: “We have a clear plan for the year ahead as our highly experienced team works hard to accelerate the execution of our strategy and we remain focused on long-term returns for shareholders.”
The group expects revenue to come in between £1 billion and £1.1 billion next year, and earnings in the range of £185 million to £205 million.
Just Eat invested £51 million last year to help deliver a “hybrid strategy”. This included £21 million in the UK to help restaurants fulfil deliveries.
Mr Duffy added: “We are creating a leading hybrid offering founded on our unrivalled marketplace, combined with the targeted rollout of delivery. This gives our growing customer base access to the greatest choice of restaurants and drives even more orders to our restaurant partners, ultimately strengthening the network effects of our business.”
However, Just Eat is under intense pressure from shareholder Cat Rock, which has ripped into the company over recent board appointments and has ordered it to seek a merger with a “well-run industry peer”.
The group, which owns 2% of Just Eat, has said this would be a better outcome than relying on the board to choose a new chief executive following the departure of Peter Plumb last month.
On Wednesday, Cat Rock said in a statement that it welcomed Mr Duffy ruling himself out of the vacant chief executive position, and again reiterated its desire for a merger.
It said: “We respect and appreciate Peter Duffy’s decision to withdraw from the CEO search process, allowing the board to secure a leader with the appropriate online food delivery experience.
“We believe that a merger with a well-run industry peer is a very attractive avenue for securing world-class leadership, delivery expertise, and a premium.”
It also rubbished Just Eat’s results, saying they “only underscore the need for a world-class CEO” with online food delivery experience.
Just Eat is attempting to keep up with Deliveroo and Uber, which have been muscling in on its territory.
Speculation that Uber is in early talks to buy Deliveroo has also recently hit Just Eat’s shares.
Shares were down nearly 2% on Wednesday afternoon at 764p.
Russ Mould, investment director at AJ Bell, said investors aren’t fooled by the buzz words used by the firm to to make the “company sound good”.