With most of Europe in lockdown you might expect food delivery apps to see bumper demand. But first quarter results from the Dutch arm of the UK’s Just Eat Takeaway.com (JET) show the damage the coronavirus is inflicting on the business.
The Amsterdam-listed food delivery business Takeaway.com released a first quarter trading update to 31 March 2020, highlighting a 50% jump in orders to 46.7m.
Shares in the London-listed combined company, Just Eat Takeaway.com, jumped more than 8% to £71.70, compared to a rough 2% gain for the FTSE 100 on Thursday.
Demand was especially strong in Germany, where orders soared 126% to 22.2m.
Orders in the Netherlands and Other Leading Markets rose a more sober 11% and 18% respectively, to 10m and 14.5m.
STING IN THE TAIL
Great growth numbers but there’s a sting in the tail. While order volumes were mainly in line with expectations for January and February, orders fell sharply from around mid-March across all regions as restaurants closed by the thousands. The firm’s office worker delivery unit, Scoober, saw even sharper declines.
But as the world turns, and people adapt to the new normal, orders have started to bounce back. The company reckons volumes are now running higher than pre-coronavirus levels.
The company has also implemented measures such as contactless delivery to limit the spread of coronavirus as well as no commission for pick-up orders and an optional deferral of fee collection to support local restaurants.
Takeaway.com did not provide an outlook as such but did say that it has a flexible cost base with access to an increased €120m credit facility.
£6BN MERGER DECISION LOOMING
Takeaway.com’s proposed £6bn merger with Just Eat is currently being investigated by the Competition and Markets Authority, which launched a review into the deal back in January.
‘The process is said to have entered its initial Phase 1 review on 19 March 2020 with a 40 working day time frame, meaning the company expects a decision in just over a month from now,’ said Megabuyte analyst Amir Fattahi.