- First-half losses increase
- Keeps full-year turnover target
- €150 million share buyback
Shares in Just Eat Takeaway.com (JET) were off to a flying start in morning trading gaining 10% from a multi-year low to £10.04 despite the food delivery business posting a slight dip in first-half sales and a bigger loss.
Investors were encouraged instead by the firm sticking to its full-year turnover target and announcing a €150 million share buyback.
SALES HOLDING UP
For the six months to the end of June, the food delivery firm reported a 3% rise in gross transaction value (ie the total value of the orders it received) excluding North America, led by a 6% increase in the UK and Ireland and a 5% increase in Northern Europe helped by the Euros football tournament.
Group revenue declined by 1% to €2.57 billion, while adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose 42% to €203 million helped by lower order fulfilment and central costs.
Free cash flow before changes in working capital improved to €38 million from minus €78 million in H1 2023, but the net loss for the period amounted to €301 million against €258 million in H1 2023 driven mainly by non-cash impairment losses and the amortisation of intangibles acquired through business combinations.
POSITIVE OUTLOOK AND BUYBACK
The food delivery business reiterated its outlook for 2024 of adjusted EBITDA of approximately €450 million and constant currency GTV growth excluding North America in the range of 2% to 6% year-on-year.
Jitse Groen, chief executive and founder, said: ‘Driven by the growth of our partner base, expansion of our delivery coverage and significant technological advancements, gross transaction volume growth further improved in H1 2024.
‘I am pleased that, at the same time, our adjusted EBITDA grew to €203 million in H1 2024, which is 42% higher than in the same period last year. We are well on track to achieve our guidance for the full year.’
The share buyback will start today and is expected to be completed no later than 31 March 2025.
EXPERT VIEW
Sean Kealy, research analyst at Panmure Liberum said: ‘Just Eat Takeaway.com has beaten consensus largely on cost this morning, against our expectations for a phased return to GTV growth in the broader sector in full year 2024 (estimated).
‘The company hasn’t performed badly – but we don’t see cause for additional optimism on this update. Our adjusted EBITDA forecast for the full year remains largely flat at €458m and we retain our 1445p target price.’
