Shares in takeaways platform Just Eat Takeaway (JET) fell 4.9% to £61.07 as its latest trading update revealed strong order growth but a continued struggle to achieve profitability in a competitive market with lots of costs.
Order growth forecast for 2021 was lifted to more than 45% from previous guidance of more than 42% order growth, excluding recently acquired US platform Grubhub. Gross transaction value including Grubhub is expected to be in a range of €28 billion to €30 billion.
For the full year 2021, management expects Just Eat Takeaway.com to generate an adjusted earnings before interest, tax, depreciation and amortisation, or EBITDA, margin in a range of -1% to -1.5% of gross transaction value.
The Just Eat business gained online share in the UK, including a significant inflection in London with triple-digit order growth in the first half of 2021 compared with the first six months of 2020.
Delivery order growth in the UK was 733% in the first half of 2021 compared with the same period last year.
PRESSURE ON PROFITABILITY
Overall order growth was up 51% in the first half year, with gross transaction value of €14.1 billion.
‘Management believes that adjusted EBITDA losses peaked in the first half of 2021 and expects its adjusted EBITDA margin to improve going forward,’ the company said.
Dan Thomas, senior analyst at research firm Third Bridge, commented: ‘Food delivery platforms continue to see good order growth despite the UK opening up again. However, profitability is being constrained by a growing number of less profitable orders.
‘Just Eat Takeaway is facing mounting competition in Germany as Delivery Hero is relaunching under its Foodpanda brand.
‘Customer offers and expanding delivery will potentially crimp margins in one of the company’s most profitable markets. Just Eat Takeaway dominates the market with its Lieferando brand but the future looks markedly more competitive.’
