Just Eat forecasts 40% core profit jump, share decline by around 6%

Just Eat Takeaway forecast a near 40% rise in 2024 core profit on Wednesday, with its CEO Jitse Groen saying the delivery group will see if there is room for another share buyback programme once its current one ends in September.

Shares in Just Eat fell by more than 6% after its updated outlook matched market expectations, with one trader saying the lack of a new share buyback programme may disappoint investors.
 

Just Eat said it was banking on strong growth in its key British and Irish markets, driven by simpler and more efficient delivery operations and higher food prices.
 

Europe's biggest food delivery company by revenue sees adjusted core earnings (EBITDA) of about 450 million euros ($487 million) in the current year, compared with 324 million in 2023.
 

Food delivery firms have been struggling with rampant customer churn rates amid soaring living costs.
 

However, the frequency of orders via takeaway apps seems to be picking up, helped by their broader offerings with the addition of grocery and retail categories.
 

Just Eat's annual EBITDA was broadly in line with the figure pre-announced in January. Analysts at Jefferies said in a note that Northern Europe, which makes up most of Just Eat's earnings, was below expectations while North America, Britain and Ireland were ahead.
 

"The competitive environment in Northern Europe seems to be improving in our favour," Groen said on a media call, adding that there were still "plenty of irrational competitors" around.
 

Just Eat expects its gross transaction value - a which measures the total value of all goods sold - to grow by 2% to 6% this year, excluding North America where it is exploring a partial or full sale of its Grubhub business.
 

"It's not an easy M&A environment," Groen said of the U.S., where fee caps cost Just Eat some $100 million per year, adding that the company would keep conversations going to secure a decent price for the unit.
 

Just Eat, which broke even on free cash flow in the second half of 2023, expects positive cash flow in 2024 and beyond.