6th Mar 2018 13:11
LONDON (Alliance News) - Just Eat intends to invest in delivery services and marketing activities in the new year, as it looks to recuperate from a large annual loss.
Shares in the FTSE 100-listed online takeaway delivery company were down 9.5% at 770.00 pence on Tuesday.
Just Eat on Tuesday reported a loss of GBP76.0 million for 2017, compared with a profit of GBP91.3 million the year before, due to a significant rise in exceptional costs to GBP191.1 million from GBP14.6 million.
The exceptional costs were mostly composed of a GBP180.4 million non-cash, IFRS-based impairment of goodwill related to Just Eat's acquisition of its Australia and New Zealand businesses, particularly the acquisition of New Zealand food-ordering company Menulog in 2015.
Excluding exceptional costs, Just Eat would have reported a pretax profit of GBP104.4 million. Underlying earnings before interest, taxes, depreciation and amortisation was up 42% at GBP164.0 million from GBP115.3 million.
The company reported group revenue of GBP546.0 million, up 45% from GBP375.7 million the prior year, boosted by a 26% rise in orders to 172.0 million, as well as strong performances from both the UK and International businesses. The 2017 results included Just Eat's acquisition of UK rival HungryHouse
The UK remained the biggest contributor to group revenue. The division recorded 28% growth in revenue to GBP303.8 million from GBP237.1 million due to 19% order growth, with December seeing the highest single day of orders, with 500,000 on the final of X Factor competition on December 3.
Just Eat's Established Markets segment, which includes Canada, Denmark, France and Ireland saw the highest rate of growth, with revenue nearly doubling to GBP148.3 million from GBP75.5 million. With the acquisition of online food delivery company SkipTheDishes, which contributed GBP50.4 million in revenue, Canada has become the group's second largest market.
In Developing Markets, which comprises Italy, Mexico and Spain, revenue rose by 69% to GBP44.4 million from GBP26.2 million the year before, with growth coming almost entirely from Italy and Spain as Just Eat plans to further grow its restaurant estate in both countries.
Finally, in Australia and New Zealand, Just Eat reported revenue at GBP49.8 million from GBP36.8 million, even as the group in the region is in a transition period, seeking to move away from its legacy platforms, by focusing on the Menulog brand and retiring the Eat Now platform. In addition, Just Eat seeks to add a delivery capability to the platform, which will require short to medium term investment to attune the model to local conditions.
Just Eat expects group underlying Ebitda in the range of GBP165.0 million to GBP185.0 million and revenue in the range of GBP660.0 million to GBP700.0 million in 2018.
The group plans to achieve this outlook through further investment in the Developing Markets segment, Just Eat's brand and delivery services. In particular, Just Eat will seek to improve its delivery services in the UK, Canada, Australia and New Zealand, and its marketing activities in its Developing Markets division.
"2017 was a record year for Just Eat. We helped 21.5 million customers order 172 million takeaways around the world, growing group revenue by 45% to GBP546 million. More restaurant partners joined our platform, increasing the breadth of choice for our customers and strengthening the group's geographical coverage to over 82,000 restaurants," said Chief Executive Officer Peter Plumb.
"As the new CEO, I will be increasing our investment in 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," Plumb added.
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