17th Aug 2021 09:39
(Alliance News) - Just Eat Takeaway.com NV reported a wider first-half loss after heavy investments to battle food delivery rivals, but said profitability will start to improve from the second half.
Revenue in the first half of 2021 more than doubled year-on-year to EUR1.77 billion from EUR675 million. The company's pretax loss widened to EUR395 million from EUR26 million.
On a combined basis - including the acquired Just Eat and Grubhub businesses for both periods - revenue was up 47% to EUR2.61 billion from EUR1.78 billion. The adjusted earnings before interest, tax, depreciation and amortisation loss was EUR190 million, swung from a profit of EUR205 million a year ago.
Shares were up 4.0% to 6,381.90 pence in London on Tuesday morning.
Profit was hit by a jump in courier costs to EUR1.02 billion from EUR181 million, as Just Eat Takeaway expanded its delivery business to compete with rivals such as Deliveroo and the Uber Eats service of Uber Technologies Inc. Previously, it took orders for restaurants who then delivered the food themselves.
The Amsterdam-based company also invested heavily in "brand awareness and share of voice" to increase its market share.
Dan Thomas, an analyst at Third Bridge, said: "The investment in delivery and extensive brand marketing is a long-term market share play but will serve to crimp margins, especially if delivery volumes cannibalise marketplace orders which are significantly more profitable overall."
But the first half of 2021 will be the peak of absolute losses, Just Eat Takeaway said. Profitability will improve, driven by the increased scale of the business, product improvements and the end of Covid-19 fee caps - limits imposed in some regions on how much commission the company can take from restaurants.
The company added that it now has the flexibility to increase delivery fees, as the price gap with competitors has widened. The benefits of price rises will be visible in the second half, although Just Eat Takeaway will "continue to invest significant amounts in providing the best and most affordable service".
Just Eat Takeaway confirmed its full-year guidance for gross transaction value between EUR28 billion and EUR30 billion and an adjusted Ebitda margin of between negative 1% and negative 1.5%. Excluding Grubhub, order numbers are expected to grow 45%.
Chief Executive Jitse Groen said: "In the first six months of this year, Just Eat Takeway.com continued to invest significantly, predominantly in the historically underinvested legacy Just Eat countries.
"Our consumer base, restaurant selection and order frequency have strongly increased, which will lead to improved profitability going forward."
The company said it is still planning to sell its 33% stake in Brazilian delivery business iFood, but that the highest bid to date - EUR2.3 billion - fell short of its valuation.
By Ivan Edwards; [email protected]
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