- Northern Europe market a standout performer
- Chunky, but lower, impairment charge
Just Eat Takeaway (JET) revealed a reduced annual loss as it put through a lower impairment charge of €1.54bn (£1.32bn) on past acquisitions, as better-than-expected adjusted cash profits (Ebitda) helped the food delivery app return to a positive free cash flow in the second half of its financial year.
A total depreciation, amortisation and impairment charge of €2.14bn this time around damaged the bottom line but was an improvement on the €5.17bn posted in 2022. The company has been hit badly over the past few years by writedowns on its acquisition of US unit Grubhub and its merger with Takeaway.
The board is still exploring a full or partial sale of Grubhub, which is something of an embarrassment given it was acquired in 2021 for over $7bn. It has been trying to offload the unit since 2022 due to weak trading and activist investor pressure.
Headwinds in North America are a material issue for the business given it is its biggest market. Order numbers and gross transaction value (GTV) each plummeted by 14 per cent there in the year, driving the overall decrease in revenue. The geographic top performer in the results was Northern Europe, which was the only locale to post top-line growth.
Demand weakness was evident across the board, though, as total order numbers and active customer numbers fell 9 per cent and 6 per cent, respectively.
The company's adjusted profits came in at €324mn, slightly above guidance of €320mn given in a trading update last month. Management now expects profits to rise by almost 40 per cent to €450mn in 2024. However, adjusted metrics should be taken with a pinch of salt. The statutory journey remains unconvincing. Sell.
Last IC view: Sell, 1,441p, 26 Jul 2023
| JUST EAT TAKEAWAY (JET) | ||||
| ORD PRICE: | 1,202p | MARKET VALUE: | £2.64bn | |
| TOUCH: | 1,200-1,203p | 12-MONTH HIGH: | 1,946p | LOW: 890p |
| DIVIDEND YIELD: | NIL | PE RATIO: | N/A | |
| NET ASSET VALUE: | 2,748¢* | NET DEBT: | 11% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (€) | Dividend per share (¢) |
| 2019 | 0.42 | -0.88 | -1.99 | nil |
| 2020 | 2.04 | -0.15 | -1.07 | nil |
| 2021 | 4.50 | -1.05 | -5.61 | nil |
| 2022 | 5.56 | -5.77 | -26.5 | nil |
| 2023 | 5.17 | -2.07 | -8.69 | nil |
| % change | -7 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| £1=€1.17. *Includes intangible assets of €7.3bn, or 3,319¢ a share | ||||
