Just Eat (JE.) is under pressure from all angles. Increasing competition from Uber Eats and Deliveroo is pushing it to invest in its delivery service, rather than act primarily as an online booking platform for restaurants’ own delivery services. And although it’s investing more in this area, the spend still came up short of the expected £55m to £60m outlay predicted at the half-year mark.
It’s also under pressure from activist investor Cat Rock Capital to merge with Takeaway.com for its delivery experience. Another potential issue is the digital sales tax proposed by chancellor Philip Hammond at the October Budget, in the view of Russ Mould, investment director at AJ Bell. If this comes into force in 2020 "analysts think Just Eat could be hit by a £10m bill", he says.
Although the company reported an impressive 43 per cent increase in revenue, an accompanying 57 per cent increase in operating costs meant that underlying cash profits improved just 6 per cent to £174m.
Analysts at broker Peel Hunt expect adjusted pre-tax profit of £177m, giving EPS of 20.1p, compared with £156m and 17.7p in 2018.
JUST EAT (JE.) | ||||
ORD PRICE: | 770p | MARKET VALUE: | £5.24bn | |
TOUCH: | 770-771p | 12-MONTH HIGH: | 889p | LOW: 519p |
DIVIDEND YIELD: | nil | PE RATIO: | 64 | |
NET ASSET VALUE: | 116p* | NET CASH: | £3.5m |
Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 157 | 57 | 9.8 | nil |
2015 | 248 | 35 | 3.8 | nil |
2016 | 376 | 91 | 10.7 | nil |
2017 | 546 | -76 | -15.2 | nil |
2018 | 780 | 102 | 12.1 | nil |
% change | +43 | - | - | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £908m, or 133p a share |