Markets responded harshly to the firm’s first set of results since being promoted to the FTSE 100 index, as the online takeaway hub found itself firmly in the red and revealed plans to invest £50m in expanding its delivery network.
The news overshadowed the fast food platform’s performance in other areas, including its group revenue nearly doubling to £546m. Its pre-tax profits were also up 42% to £164m.
Its shares opened over 14% lower at 729p, the lowest level they have traded at in over four months. As markets continued digesting the news, the share price rebounded slightly to 776p.
Despite swinging to a loss, new CEO Peter Plumb called it “a record year for Just Eat,” in which 21.5 million customers visited the site to place 172 million takeaway orders worldwide.
Its international operations have increasingly become a bigger part of the business and now account for 44% of the group’s total revenue.
Restaurant partners continued joining the platform throughout the year, bringing the group’s geographical coverage to over 82,000 restaurants, Plumb pointed out.
Just Eat has become a beloved growth stock, appearing in the top 10 of the £140m Standard Life UK Opportunities fund run by Abby Glennie, the Aberdeen UK Mid Cap Equity and Responsible UK Equity funds and the €847m JP Morgan Europe Dynamic Small Cap vehicle.
Moving forward, Plumb vowed to increase investment in the firm’s brand “developing markets and delivery services that will be engineered to complement our thriving marketplace business by bringing more choice to our takeaway-loving customers.”
Specifically, he discussed delivering more food on behalf of big branded restaurants like KFC and Burger King, which he called an £18bn opportunity and a “significant new driver of long-term growth.” Traditionally, the firm has collected orders on behalf of independent restaurant owners.
