Shares in Just Eat (LON:JE) have fallen into the red in today’s session even as the company posted a rise in revenue for last year. The results come at a sensitive time for the online delivery service which has been facing investor calls to start merger discussions.
As of 09:39 GMT, Just Eat’s share price had given up 1.79 percent to 766.20p, underperforming the FTSE 250 which currently stands 0.15 percent lower at 19,414.38 points. The group’s shares have added just under three percent to their value over the past year, as compared with about a 1.4-percent drop in the mid-cap index.
Just Eat posts full-year results
Just Eat announced in a statement this morning that its revenue had soared 43 percent to £779.5 million last year, generating underlying EBITDA of £173.9 million, six percent higher year-on-year. The group’s net operating cash flow, however, dipped six percent to £157.3 million.
Going forward, the London-listed company expects to report full year 2019 revenue of between £1 billion and £1.1 billion and uEBITDA in the range of between £185 million and £205 million, with both results excluding Brazil and Mexico.
Analysts weigh in on update
Proactive Investors quoted Hargreaves Lansdown’s Laith Khalaf as commenting that while most companies would be delighted at Just Eat’s sales growth, the online deliver group’s position was ‘more complex than that’.
“Deliveroo and Uber Eats are pushing their delivery services hard, and increasingly trying to muscle into Just Eat’s marketplace business of connecting hungry people to takeaways, who then handle the delivery themselves,” the analyst explained, adding that Just Eat was “trying to work with the same sort of branded restaurants their rivals are targeting, and offering their own delivery offering”.
“None of this comes cheaply, and the costs are holding profits back,” Khalaf pointed out.