Are investors getting nervous about Just Eat’s (JE.) ability to maintain its position in the market? The online takeaway ordering sub-sector is becoming increasingly crowded, and Just Eat will have to up its game if it wants to remain ahead of the pack – a pack which now includes market disruptor Uber after the app-based taxi company rolled out its delivery service across the UK.
The shares fell in response to these half-year figures, even though revenue growth comfortably beat consensus expectations. But cash profits – albeit still up 12 per cent – only reported in line as the group continued to invest in technology and logistical operations. Margins in the UK landed at 49 per cent, but that actually marked a 300 basis point squeeze, while reported profits were constrained as the group absorbed costs associated with its acquisition of Hungryhouse. Even though the deal is expected to enhance domestic growth rates, analysts at Peel Hunt expect management to plough any accretive earnings back into the business.
For now, the brokerage still expects pre-tax profits of £167m in 2018, giving EPS of 18.8p, compared with £149m and 16.6p in 2017.
| JUST EAT (JE.) | ||||
| ORD PRICE: | 798.8p | MARKET VALUE: | £5.4bn | |
| TOUCH: | 798.6-799p | 12-MONTH HIGH: | 906p | LOW: 596p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 109p* | NET DEBT: | 0.9% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 247 | 49.5 | 5.5 | nil |
| 2018 | 358 | 48.1 | 5.5 | nil |
| % change | +45 | -3 | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £862m, or 127p a share | ||||
