3rd May 2016 10:17
LONDON (Alliance News) - Shares in Just Eat PLC climbed to the top of the FTSE 250 on Tuesday after it raised its guidance for full-year revenue and earnings following a successful first quarter, a move which it also made twice in 2015.
Shares in Just Eat were trading up 8.5% at 416.00 pence on Tuesday morning, the best performer in the FTSE 250.
The online takeaway delivery company said it achieved 57% growth in orders in the first quarter of 2016 year-on-year to 31.5 million, up 41% on a like-for-like basis. It said each of its segments delivered strong growth, particularly in the UK which saw a 40% increase in orders.
In addition, a one percentage point increase in the commission rate for existing UK restaurants which came into effect in early April, alongside a change from twice monthly to weekly payments, will "significantly improve" its partners' cash flows, Just Eat said.
As a result of this, Just Eat said it has increased its full-year revenue guidance to GBP358 million from GBP350 million, while raising its underlying earnings before interest, tax, depreciation and amortisation target to between GBP102 million and GBP104 million from between GBP98 million and GBP100 million.
In 2015, Just Eat twice raised its guidance for full-year revenue, which it then went on to beat when it released its full-year results in March this year.
Last August, it raised its guidance to GBP230 million, before increasing it again to "slightly above" GBP240 million in November. It then revealed in March that revenue had reached GBP247.6 million, growing more than half from the GBP157 million made in 2014.
Underlying Ebitda in 2015 also increased by 83% to GBP59.7 million from GBP32.6 million in 2014.
Online takeaway companies have been performing very well in the food sector in recent times, with some analysts noting a threat they pose to traditional restaurants.
In March, fellow FTSE 250-listed pizza delivery company Domino's Pizza Group PLC beat the consensus estimate for its pretax profit when it released better-than-expected full-year results.
In contrast, Restaurant Group PLC, which owns Frankie & Benny's, Chiquito and Garfunkel's, broke a chain of continuous profit growth when last week it revealed a profit warning for its full financial year, blaming it on a tough trading environment.
Edison Investment Research Analyst Paul Hickman said the group was facing competition from takeaway firms such as Just Eat and Domino's.
Just Eat added Tuesday the integration of the businesses acquired in Italy, Brazil and Mexico in February is going well with strong order growth in each of those markets.
It bought Spanish takeaway food business La Nevera Roja and Italian PizzaBo/hellofood Italy from Rocket Internet, and hellofood Brazil and hellofood Mexico from foodpanda, for EUR125.0 million in total.
"We have had an excellent start to 2016 and I am delighted with the company's performance and the momentum in the business," Chief Executive David Buttress said on Tuesday.
"Our focused strategy and improvements to both our consumer offering and restaurant support are working and we are well positioned to continue benefiting from channel shift in the category," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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