- Orders fall but revenues rise as costs pushed onto consumers
- Analysts not buying positive 2023 EBITDA target
- €3 billion loss booked for Grubhub may not be the end of US disaster
How about this for inflation; Just Eat Takeaway (JET) saw orders fell 7% in the first half (to 30 June 2022) yet revenues rose 7% as cost increases were pushed directly through to consumers. How far and for how long diners will be willing to stomach rising prices for home delivered dinners remains to be seen, but investors should beware.
Management reaffirmed full year 2022 GTV (gross transaction value) guidance of growing by mid-single digits and for an adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) margin between -0.5% and -0.7% of GTV.
POSITIVE EBITDA PIPEDREAM?
Berenberg analysts estimate nearly €800 million of net losses this year, and that’s presuming further cost control initiatives in the second half. The investment bank certainly isn’t buying management’s talk of positive adjusted EBITDA in fiscal 2023. Berenberg forecasts net losses of €530 million and €378 million for 2023 and 2024, respectively.
Just Eat also booked a €3 billion loss on its US business Grubhub, bought for $7.3 billion just two years ago. Yet that looks like just a part of the financial disaster Grubhub will eventually be, with some analysts predicting a final sale price of less than $1 billion.
The London-traded stock rose 4% to £16.17 in response, but it’s not easy to see why. The share price has traded at nearly £100 a couple of years back, and getting back there looks like a bridge too far.
