The group increased the commission rate for UK restaurants from 12% to 13% in April – earlier than anticipated – and has moved from twice monthly to weekly payments to avoid excessive churn.
The commission hike has resulted in the group lifting its full year revenue guidance from £350 million to £358 million. This compares with revenue of £247.6 million in 2015.
Underlying EBITDA (earnings before interest, tax, depreciation and amortisation) is forecast to be between £102 million and £104 million, up from previous expectations of £98 million to £100 million.
Like-for-like sales grew by 41% in the first quarter, with a higher-than-expected 40% rise in the UK despite fierce competition from the likes of Deliveroo.
Stockbroker Peel Hunt reckons the momentum will continue to improve in the second quarter, particularly as the UK and European divisions should benefit from the upcoming UEFA European Championship.
Barclays Capital’s target price is 550p, implying 33% upside.