Just as fears over slowing growth at online takeaway service Just Eat (JE.) started to mount, the group has reported a significant acceleration in orders during the second quarter. This translated into a 38 per cent rise in constant-currency revenue at the halfway stage, prompting an upgrade to full-year sales guidance of around 4 per cent. Annual sales will now report in the region of £500m to £515m, although most of this extra income will be reinvested. This means another missed opportunity to instigate dividend payments, although interim chief executive Paul Harrison assures us the topic “features at most board meetings”.
Fears over slowing growth have been driven by high levels of competition in some of Just Eat’s key markets – something regulators have picked up on since the company’s Hungry House acquisition last year. But Mr Harrison is sanguine on this point. “Many of our markets are dynamic,” he says, “but we make a virtue of it by improving our service.” One such initiative includes working with UK restaurant partners to decide how they are compensated by a change in legislation prohibiting them from charging fees to customers using credit cards.
Analysts at Peel Hunt expect pre-tax profit of £155m for the year ending December 2017, giving EPS of 17.5p, compared with £107m and 12p in 2016.
| JUST EAT (JE.) | ||||
| ORD PRICE: | 694p | MARKET VALUE: | £4.71bn | |
| TOUCH: | 693-694p | 12-MONTH HIGH: | 723p | LOW: 484p |
| DIVIDEND YIELD: | nil | PE RATIO: | 55 | |
| NET ASSET VALUE: | 128p* | NET DEBT: | £143m† | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 171.6 | 33.8 | 3.7 | nil |
| 2017 | 246.6 | 49.5 | 5.5 | nil |
| % change | +44 | +46 | +49 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £835m, or 123p a share | ||||
| †Excludes £33.6m cash to be paid to restuarants | ||||
