Interim Results 2014

JUST EAT plc

JUST EAT plc today reports another period of excellent growth in the six months ended 30 June 2014 with revenue up 58% to £69.8m and Underlying EBITDA up 591% to £15.9m.

As the world's largest online & mobile marketplace for takeaway, JUST EAT connects 6.9 million Active Users to over 40,000 takeaway restaurants in 13 countries.

Financial Highlights

· Revenue up 58% to £69.8m (H1 2013: £44.1m)

· Orders up 50% to 27.5m (H1 2013: 18.3m)

· Underlying EBITDAi up 591% to £15.9m (H1 2013: £2.3m)

· Basic earnings per share up 200% to 1.2p (H1 2013: 0.4p)

· Adjusted basic earnings per shareii increases to 2.1p (H1 2013: loss 0.1p)

· Operating Cashflow of £15.4m, (H1 2013: £8.7m), representing 97% of Underlying EBITDA

Operational and Strategic Highlights

· Active Usersiii up 35% to 6.9m (as at 30 June 2013: 5.1m)

· 4,400 net increase in contracted takeaway restaurants to 40,800 (H1 2013: increase of 4,200iv)

· Orders via mobile devices are now over 50% of total orders for the first time

· The platform processed orders worth £465m for our takeaway restaurants (H1 2013: £311m)

· EPOS provider Meal2Go acquired in February 2014; Collection app Orogo acquired in July 2014

Enquiries

JUST EAT: +44 (0) 20 3667 6900

David Buttress, Group Chief Executive Officer

Michael Wroe, Group Chief Financial Officer

Frank McGlade, Head of Corporate Development and Interim Head of Investor Relations

Brunswick Group LLP: +44 (0) 20 7404 5959

Sarah West, Natalia Dyett

About the JUST EAT Group

JUST EAT operates the world's largest online market place for restaurant delivery. JUST EAT is based in London and is now active in 13 countries around the globe. Its revenues in 2013 were £96.8 million and grew 58% in H1 2014 compared with the same period in 2013. There are currently over 40,000 takeaway restaurants within the JUST EAT network, which uses proprietary technology to offer an efficient online ordering service. The brand has also won multiple marketing awards, including a 2013 SABRE award for Best Guerrilla Marketing. 

www.just-eat.com/investorsv

i Underlying EBITDA is the main measure of profit used by management to assess the performance of the Group's businesses. It is based on EBITDA (defined as earnings before finance income and costs, taxation, depreciation and amortisation) but excludes the Group's share of depreciation and amortisation of joint ventures and associates, long term employee incentive costs, exceptional items, currency translation differences and 'other gains and losses' (being profits or losses arising on the disposal of operations). At a segmental level, Underlying EBITDA also excludes intra-group franchise fee arrangements and incorporates an allocation of Group technology costs (both of which net out on a consolidated level). A reconciliation between Underlying EBITDA and Profit Before Tax is shown in note 3.

ii Adjusted Basic Earnings per Share is the main measure of earnings per share used by the Group and is calculated using underlying profit attributable to the holders of Ordinary shares in the parent before long term employee incentive costs, exceptional items, 'other gains and losses' (being profits or losses on the disposal of operations), foreign currency translation differences and the tax impact of the adjusting items.

iii An Active User represents an account that has placed at least one order within the last 12 months.

iv After adjusting for the impact of the change in control in our Swiss and Indian businesses.

v The content of the JUST EAT web site should not be considered to form a part of or be incorporated into this announcement.

JUST EAT plc ("JUST EAT", the "Company" or the "Group")

Unaudited Interim Results for the six months ended 30 June 2014

Introduction to JUST EAT

JUST EAT operates the world's largest online market place for takeaway food, providing hungry consumers with an easy and secure way to order from takeaway restaurants in their local area. Takeaway restaurants have their menu made accessible to all online consumers via JUST EAT's mobile apps and websites. JUST EAT has a contractual relationship with all of its restaurants. Consumers are able to search for local takeaway restaurants, place orders online and pay either online or by cash on delivery. JUST EAT estimates the value of the takeaway delivery markets in the territories in which it operates to be £20 billion with further scale possible in the collection/pick-up markets. The adoption of ecommerce continues to drive the growth in online takeaway ordering and the value proposition from JUST EAT as an online aggregator is compelling for both consumers and restaurants.

JUST EAT currently operates in 13 geographies and primarily derives its revenue from commissions charged to restaurants on the value of successful orders placed by consumers. With minimal capital expenditure and approximately 60% of all orders paid by card, the Group benefits from a negative working capital cycle despite its rapid growth. 

Operational Review

We achieved excellent revenue growth with revenues up 58% compared to the same period last year, reaching £69.8 million (H1 2013: £44.1 million). Our UK operation continues to be the main driver of growth, with revenues up by 69% to £51.9 million (H1 2013: £30.8 million). The UK now represents 74% of the Group's total revenue. The Danish business, operating in our most mature and established market, grew revenues by 12% (16% growth on a forex neutral basis) to £6.5 million (H1 2013: £5.8 million). Our Other segment, comprising nine geographies at various stages of development, includes a number of rapidly growing early stage territories where the opportunity for long term growth is exciting. Revenues in this Other segment grew 51% to £11.3 million (H1 2013: £7.5 million). On a forex neutral basis, the growth in the Other segment would have been 60%.

The key drivers of our revenue growth comprise:

· a 50% growth in consumer orders compared with the same period last year;

· ARPO growth of 8% to £2.26 per order;

· an increase in the number of restaurant partners on the platform to 40,800;

· Active User base growing to 6.9 million (31 Dec 2013: 5.9 million; 30 June 2013: 5.1 million); and

· our mobile first strategy, resulting in Group orders via mobile devices exceeding 50% for the first time.

Order driven revenues now account for 89% of total revenues, the largest element of this is commission on orders. Commission is paid by the restaurants after receiving a successful order from JUST EAT. Commission revenue is driven by two factors, order numbers and commission rates. Both of these increased in the period across all three operating segments. Across the Group, orders grew by 50% to 27.5 million and ARPO (a combination of commission on orders and card/administration fees) grew by 8% to £2.26, compared with the same period in 2013. The largest single driver in ARPO growth was the increase in UK commission rates, which was successfully introduced to all restaurants on 1 January 2014, reinforcing the value proposition offered by JUST EAT to our restaurant partners. 

Group profitability increased substantially in the period notwithstanding continued investment in technology, product, marketing and people. This demonstrates the inherent operational leverage and scalability of our business model where incremental revenues flow through to significant profitability.

During 2013, we invested heavily in ensuring the stability, scalability and security of our platform, including the migration of our core platforms to Amazon Web Services' cloud environment. Our demand is highly concentrated at weekends and evenings and we have been delighted by our continued high core platform availability and our ability to deal with peak volumes, such as the 1,000 orders a minute processed for hungry romantics on Valentine's Day 2014.

In addition, we have continued to develop our product offering. During H1 2014 this included the launch of the iPad and Android Tablet apps. These complement the ordering methods already available to consumers. In the UK, orders can now be made through Android, iPhone, iPad or Windows8 apps, a Kindle, PC and through certain SmartTVs. International product roll-out of these features will continue through the second half of 2014 alongside feature improvements for existing apps. The number of orders being placed through mobile devices continues to increase, exceeding 50% of total orders for the first time across the period.

During the first half of the year, the Group progressed three important new initiatives designed to improve and expand our offering to consumers:

1. Collection - The collection/pick-up market is a large and broadly untapped opportunity for JUST EAT. A collection pilot in Brighton was conducted during H1, signing collection-only restaurants to the JUST EAT.co.uk network. We have signed a number of collection-only restaurants and early indications are positive. Product improvements are being made on the back of these initial findings. For example, the iOS apps now incorporate a slider to enable consumers to select delivery or collection when ordering their takeaway. Furthermore, as part of enhancing our understanding and offering in this important sector, we completed the acquisition of start-up London-based collection app, Orogo, in July 2014.

2. OrderTracker - The Group is now piloting an early stage R&D project that will allow both consumers and restaurant owners to track a takeaway delivery as it moves through the order/cooking/delivery process. Once implemented, it is hoped this technology will help relieve one of the biggest sources of consumer frustration when awaiting a takeaway delivery.

3. EPOS - The Group remains committed to improving the technology available to our restaurant partners in managing their businesses and enhancing the takeaway experience for consumers. Our dedicated in-house EPOS development team has conducted a number of technology trials of our OrderPoint EPOS systems and in February 2014 we completed the purchase of Meal2Go. Meal2Go's market leading EPOS technology is specifically designed for the takeaway restaurant industry and enables JUST EAT to offer its takeaway restaurant partners a central system for managing their orders and customer service.

During H1 2014, the Group invested £15.2 million (H1 2013: £12.0 million) on marketing activities. Building a brand in each of our 13 territories is a core part of our strategy to drive growth and create a highly defensible position. Our marketing splits broadly into three categories, digital, trade and brand (including TV). The efficiency of our digital and trade marketing continues to improve, enabling JUST EAT to deploy additional marketing spend to brand activities, whilst reducing the cost of marketing as a percentage of revenues. The Group has now rolled-out television marketing in 11 of the 13 countries in which we operate. Notable TV campaigns in the period include the sponsorship of ITV's Take Me Out in the UK and the successful launch of TV marketing in Spain. In addition, we have seen positive results from recent transport advertising as part of our trade marketing strategy, advertising in train stations in London, trams in Toronto and taxis in Dublin.

The average number of full time equivalent employees grew to 1,075 in the six months to 30 June 2014, up from 843 in the same period last year. Our people are critical to our success. Maintaining a high performance, entrepreneurial culture is a key focus for the management team. Initiatives to support this include the continued expansion of JUST EAT's training Academy and the roll-out of the multi-tiered JUST EAT Management Stars (JEMS) talent development programmes. With 13 operational countries, we have a broad spectrum of employees helping to create a great place to work and a fantastic team spirit enabling us to recruit and retain the best people. 

We continue to monitor the market for potential acquisition and partnership opportunities. Our policy is to remain financially disciplined and to focus on accretive acquisitions which consolidate our existing market positions, bring technological innovation or which are clear market leaders of scale in new territories. We have recently completed the £3.7 million acquisition of EPOS-technology business Meal2Go in February 2014 and the acquisition of innovative London-based collection app Orogo in July 2014. Also in July 2014, we increased our stake in our French JV partner alloresto.fr from 50% to 80% for consideration of £5.5 million.

CFO Update and Financial Review

Financial Report and Results

UK

Revenue £51.9m, 69% growth on the same period last year (H1 2013: £30.8m) 

Underlying EBITDA £20.3m, 103% growth on the same period last year (H1 2013: £10.0m) 

The UK business has had an excellent start to 2014 with revenue growth of 69% to £51.9 million generated predominantly from a 58% increase in orders compared with the same period last year. Revenue growth was ahead of order growth as a result of the impact of underlying food inflation coupled with the successful introduction of a one percentage point commission increase across the UK restaurant base on 1 January 2014.

Key drivers of order growth include:

· expansion of the restaurant partner network where we added 2,500 net new takeaway restaurants to the platform during the period (2,400 in the same period last year);

· an overall increase in Active Users coupled with the continuous improvement of our mobile offering, including the recent launch of iPad and Android tablet apps;

· investment in UK marketing, which continued to grow with a total spend of £9.6 million in the period (up 28% on H1 2013), all of which was expensed to the income statement. This was incurred on a number of initiatives, including sponsoring ITV's Take Me Out and becoming the main shirt sponsor for Derby County Football Club. These initiatives complemented our on-going activities in digital, trade and brand marketing. Marketing spend as a percentage of revenue declined to 19% from 24% in the same period last year. This is a bigger drop than expected for the full year due to phasing of spend across the year;

· a particularly wet period of winter weather in the first two months of the period provided an additional boost as consumers chose to stay indoors.

Underlying EBITDA margin in the UK grew to 39% from 32% in the same period last year. Our belief in the scale of the opportunity in the UK means that we will continue to invest heavily in sales, marketing, technology and product to drive long-term growth. The inherent operational leverage of our business model means that we continue to expect Underlying EBITDA margin improvements.

Denmark

Revenue £6.5m, 12% growth on the same period last year (H1 2013: £5.8m)

Underlying EBITDA £2.7m, 35% growth on the same period last year (H1 2013: £2.0m) 

The Danish business has continued to grow well in the relatively mature Danish online takeaway market. Revenue growth of 12% to £6.5 million was driven in part by orders (up 5% on the same period last year), gradually increasing commission rates and improved conversion of TopPlacement advertising. On a forex neutral basis, revenue growth in Denmark would have been 16%.

The Underlying EBITDA margin percentage during the period was better than planned at 42%, mainly as a result of a low senior staff cost. This continued performance in the absence of a number of key roles is a credit to the wider team in Denmark and we are delighted that the senior team is now back to full strength under the leadership of new Managing Director, Carsten Boldt, who joined in June 2014.

Other

Revenue £11.3m, 51% growth on the same period last year (H1 2013: £7.5m) 

Underlying EBITDA loss of £4.9m, 35% improvement on the same period last year (H1 2013: loss of £7.5m)

The Other segment consists of the trading entities we control outside the core UK and Danish businesses, including our key countries of Ireland, Canada and Spain. Our French business became part of this segment in July 2014 (see below).

Progress in our key geographies in this segment remains on track, with revenue growth of 51% to £11.3 million which would have been 60% on a forex neutral basis. This segment represents a blend of growth rates across the nine geographies with Canada, Spain, Italy and Brazil at the higher end and slightly slower growth in our more mature markets such as the now profitable Irish business. The only outlier within this category is the highly competitive Benelux region, which contracted slightly in the period. This demonstrates the importance of achieving clear market leadership.

Underlying EBITDA losses have improved to £4.9 million from a loss of £7.5 million in the same period last year. However, losses for the full year in this segment will, as expected, be similar to the 2013 losses as we plan a number of growth initiatives in H2 2014. For example, our Spanish business commenced its first TV campaign in May 2014 and based on the initial results, we are committing additional funds to another Spanish campaign in the second half of the year. 

The low levels of online penetration for takeaway ordering in the majority of these geographies provides substantial additional long term runway for JUST EAT and we will continue to invest heavily to drive growth and secure market share in these early stage opportunities.

Share of profits from the JV and associate, and Head Office Costs

Results from equity accounted JVs and associates £0.1m (H1 2013: £0.1m)

Head Office Revenue £0.1m (H1 2013: £nil)

Head Office Underlying EBITDA loss of £2.3m (H1 2013: loss of £2.3m)

The Group's French joint venture and Indian associate continue to perform as expected. The Group increased its share in the French business from 50% to 80% on 24 July 2014 and the French results will be fully consolidated into the Group's results for the second half of 2014.

The Head Office costs for the full year will be in line with expectations and will therefore be higher in the second half of 2014 compared to the first half, this reflects the full period impact of being a public company and with the planned increased investment in people, technology and product. Technology and product costs are expensed as incurred and most technology and certain Head Office costs are recharged to the Group's operational businesses such that segmental EBITDAs include all appropriate costs.

The Group has opened a second UK technology site in Bristol in order to attract talent from the West Country and Wales. This supplements the main London-based team and the small team operating in Kiev, Ukraine. The team in Kiev continues to deliver despite recent local challenges.

Overall Group results

Revenue £69.8m, 58% growth on the same period last year 

Underlying EBITDA £15.9m, 591% growth on the same period last year

The Group's revenues and Underlying EBITDA are generated by the four segments covered above. When consolidated, this shows Underlying EBITDA has increased from £2.3 million in the same period last year to £15.9 million in the six months to 30 June 2014, representing a 23% Underlying EBITDA margin. Operating profit also increased from breakeven to £8.5 million over the same period last year.

Underlying EBITDA and Operating Profit differ due to the following material items:

· Long term employee incentive costs of £2.5 million (H1 2013: £0.6 million) which primarily relate to share awards granted to employees are recognised over the vesting period of the awards. The increased charge reflects the additional awards at or around the time of the IPO, including the free share award granted to all qualifying employees.

· Exceptional items of £2.4 million (H1 2013: £nil) include £2.3 million of costs relating to the IPO and £0.1 million of acquisition costs.

· Depreciation and Amortisation of £2.3 million (H1 2013: £1.8 million) which has increased as a result of the intangible assets recognised as part of the Meal2Go acquisition.

· Other gains were £nil (H1 2013: gain of £3.1 million). This prior period gain related to the notional profit on the deemed disposal of the Group's Swiss joint venture interest when it became a subsidiary in January 2013. This Swiss gain was included within "Other gains" as it is considered non-operational.

Profit before tax

Profit before tax resulting from the above was £8.6 million, compared with £3.1 million in the same period last year. The 2013 profit before tax included the notional gain on our Swiss joint venture (see above) of £3.1m and without this the 2013 comparable PBT would have been £nil.

Taxation

The income tax expense was recognised based on management's best estimate of the annual income tax rate expected for each jurisdiction for the full financial year, applied to the profit before tax for the interim period, on a jurisdiction by jurisdiction basis. The Group's tax charge has increased to £2.6 million (up from £1.1 million in the same period last year) but the effective tax rate has fallen to 30.2% from 35.5% in the same period last year.

Profit after tax

Profit after tax is £6.0 million, compared with £2.0 million profit in the same period in 2013. The 2013 profit after tax included the £3.1 million notional gain on our Swiss joint venture (see above). Without this, the 2013 profit after tax would have been a loss of £1.1 million.

Earnings per share

Basic earnings per share for the period were 1.2p (2013: 0.4p) and Adjusted basic earnings per share for the period were 2.1p (2013: (0.1)p). The movement in the period on these two measures is due to the higher profit generated, partly offset by the dilution caused by the primary issue of shares on IPO.

Financial Position and Cash Flow

The Group continued its high level of cash conversion. We have a low operational capital expenditure requirement and benefit from collecting the gross order value ahead of making twice monthly net payments to the restaurants. As a result, cash generated from operations was £15.4 million in the six months ended 30 June 2014 (H1 2013: £8.7 million).

When compared to Underlying EBITDA, this represents a conversion of 97% of earnings to cash. Adjusting for the operational cash flow impact of the Joint Share Option Plan ("JSOP") which has no impact on the Group's overall cash flow, this conversion would have been 130%. 

The Group raised £96.0 million (net of fees) through the primary proceeds of the IPO and paid a pre-IPO dividend of £18.25 million. As at the 30 June 2014 the Group had cash balances totalling £154.0 million (30 June 2013: £54.8 million; 31 December 2013: £61.6 million).

The Group had no debt at 30 June 2014 (30 June 2013: nil).

The major movements of note in the balance sheet since the year end include:

· a number of balances were impacted by the IPO including cash proceeds from the primary offering, the associated movements in equity and the loans to directors and staff as part of share option awards which are shown in trade and other receivables; and

· trade and other payables have increased due to growth in our operations which also results in a higher balance owed to the restaurants at the period end. This is usually settled within 8 days of the month end.

Initial Public Offering

On 8 April 2014 the Company's Ordinary shares were admitted to the High Growth Segment ("HGS") of the Main Market of the London Stock Exchange. Before transaction costs, the Company raised £100 million of new capital via the issue of 38,461,538 new Ordinary shares. JUST EAT was the first company to list on the HGS. As part of this process, the Group's ultimate parent company changed its name from Just-Eat Group Holdings Limited to JUST EAT plc and reregistered as a plc on 24 March 2014.

On 6 May 2014, the Group transitioned from the HGS of the Main Market to the premium listing segment of the Official List of the UK Financial Conduct Authority and on 20 June 2014, JUST EAT officially entered the FTSE 250 Index.

Non-Executive Director Appointments

During the period, the Board has been strengthened by the appointment of three independent Non-Executive Directors who bring their skills and expertise to the Group, particularly in helping it adapt to the listed environment without losing the JUST EAT spirit which has been so key to our success thus far:

Gwyn Burr joined the Board in March 2014 and chairs the Remuneration Committee. Gwyn is currently also serving as a non-executive director at Hammerson plc, Sainsbury's Bank plc and Financial Ombudsman Service Limited. From May 2005 to March 2013, she was Customer Director and a member of the operating board for J Sainsbury plc.

Andrew Griffith also joined the Board in March 2014 and chairs the Audit Committee. Andrew is CFO of British Sky Broadcasting Group plc ("BSkyB"), a role he has held since April 2008. In 2012 he also gained responsibility for BSkyB's commercial businesses, including advertising, data services and broadcasting to licensed premises.

Henri Moissinac was appointed as an independent Non-Executive Director with effect from 1 August 2014. He brings with him a wealth of international experience in consumer digital, mobile and e-commerce. Henri leads Mobile Business Development at Uber for Europe, Middle East and Africa after spending six years with Facebook where he helped to grow its mobile users to almost a billion.

Corporate Social Responsibility

JUST EAT is undertaking a comprehensive review of its Corporate and Social Responsibilities. As part of this process, the Group recently selected Starlight Children's Foundation to be its nominated charity and focus for future support, fundraising and sponsorship.

Dividend and Dividend Policy

On 2 April 2014, as part of a pre IPO capital reorganisation, the Directors declared a dividend of £18.25 million (2013: £nil), that was paid, on 8 April 2014, to the holders of Preference A shares, Preference B shares, Preference C shares and ordinary shares pro rata to their holding of shares in the Company. Going forward the Group intends to retain any earnings to expand the growth and development of the business and, therefore, does not anticipate paying dividends in the foreseeable future.

Related Party Transactions

Related party transactions are disclosed in note 14 to the Interim Financial Statements. The only material change to the related party transactions described in the last annual report relate to the loans issued to certain employees and directors in relation to the Joint Share Option Plan ("JSOP") in February 2014.

Principal Risks and Uncertainties

The principal risks and uncertainties set out at the time of the prospectus (issued in April 2014) and the last annual report remain valid at the date of this report. In summary, these include the fast moving technical environment, the interdependent IT systems in the business, the risk of online security breaches and disruptions to operations due to hacking, viruses, fraud and malicious attack, the possibility of search algorithms changing and the risks relating to receipt and processing of online payments. The Group is required to value acquired intangible assets, share based payments, financial instruments and apply judgment to revenue recognition and deferred tax. A more detailed description of these estimation uncertainties is included in the prospectus or last annual report, which can be obtained from the Company's registered office.

Going Concern

As stated in note 2 to the Interim Financial Statements, the Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of at least 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the Interim Financial Statements.

Cautionary Statement

This report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Interim Management Report should not be relied on by any other party or for any other purpose.

This report includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations. Any forward-looking statements in this report reflect the Company's current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this report regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which speak only as of the date of this report. No representations or warranties are made as to the accuracy of such statements, estimates or projections. Other than in accordance with its legal or regulatory obligations, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

In making this report, the Company is not seeking to encourage any investor to either buy or sell shares in the Company. Any investor in any doubt about what action to take is recommended to seek financial advice from an independent financial advisor authorised by the Financial Services and Markets Act 2000.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge:

· the Interim Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting;

· the Interim Management Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

· the Interim Management Report includes a fair review of the information required by DTR 4.2.8R (disclosure of relates parties' transactions and changes therein).

David Buttress Michael Wroe

Chief Executive Officer Chief Financial Officer

11 August 2014 11 August 2014

Condensed Consolidated Income Statement (unaudited)

For the six months ended 30 June 2014

Underlying EBITDA is the main measure of profitability used by the Group and is defined as earnings before finance income and costs, taxation, depreciation and amortisation and additionally excludes the Group's share of depreciation and amortisation of joint venture and associates, long term employee incentive costs, exceptional items and foreign currency translation differences.

Condensed Consolidated Statement of Other Comprehensive Income (unaudited)

For the six months ended 30 June 2014

Condensed Consolidated Balance Sheet (unaudited)

As at 30 June 2014

Condensed Consolidated Statement of Changes in Equity (unaudited)

Six months ended 30 June 2014

Condensed Consolidated Statement of Changes in Equity (unaudited)

Six months ended 30 June 2014

Condensed Consolidated Cash Flow Statement (unaudited)

For the six months ended 30 June 2014

1. General information

The Directors of JUST EAT plc (the "Company") present their interim report and the unaudited condensed consolidated financial statements for the six months ended 30 June 2014 ("Interim Financial Statements").

The Company is a public limited company, incorporated and domiciled in the UK. Its registered address is Masters House, 107 Hammersmith Road, London, W14 0QH.

The Interim Financial Statements have been reviewed, but not audited, by Deloitte LLP and were approved by the Board of Directors on 11 August 2014.

The information for the year ended 31 December 2013 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Interim Financial Statements should be read in conjunction with the Annual Report and Financial Statements, for the year ended 31 December 2013, which were prepared in accordance with European Union endorsed International Financial Reporting Standards ("IFRS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Annual Report and Financial Statements for the year ended 31 December 2013 were approved by the Board of Directors on 17 March 2014 and delivered to the Registrar of Companies. The auditor's report on those financial statement was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.

2. Basis of preparation

The Interim Financial Statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as endorsed by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

The Interim Financial Statements are presented in Pounds Sterling, rounded to the nearest million, unless otherwise stated. They were prepared under the historical cost convention, except for deferred contingent consideration and provisions for social security costs on the exercise of options by employees which were measured at fair value.

Going concern

The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of at least 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the Interim Financial Statements.

Accounting policies

The accounting policies adopted in the preparation of the Interim Financial Statements are consistent with those applied in the preparation of the Group's consolidated financial statements for the year ended 31 December 2013.

IAS 34 'Interim financial reporting' - Segment information for total assets and liabilities (Amendment)

The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 'Operating Segments'. Total assets and liabilities for a reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker ("CODM") and there has been a material change in the total amount disclosed in the entity's previous annual consolidated financial statements for that reportable segment.

The amendment had no impact on the Group's financial position or performance as its scope affects presentation only. The adoption of the amendment did not result in any additional disclosures by the Group.

Other changes to accounting standards in the current period had no material impact on the Group.

3. Segmental analysis

The Group has three reportable segments: United Kingdom, Denmark (core business) and Other. Each segment includes businesses with similar operating and marketing characteristics. Underlying EBITDA is the main measure of profit used by the Chief Operating Decision Maker ("CODM") to assess and manage performance. The CODM is David Buttress, the Group's Chief Executive Officer. Underlying EBITDA is defined as earnings before finance income and costs, taxation, depreciation and amortisation ("EBITDA") and additionally excludes the Group's share of depreciation and amortisation of joint ventures and associates, long term employee incentive costs, exceptional items, foreign exchange gains and losses and 'other gains and losses' (being profits or losses on the disposal of operations). At a segmental level, Underlying EBITDA also excludes intra-group franchise fee arrangements and incorporates an allocation of Group technology costs (both of which net out on a consolidated level).

The Group does not analyse revenue by product.

The non-current asset additions represent additions of goodwill, other intangible assets and property, plant and equipment.

4. Long term employee incentive costs

The information in this note is stated after restating for the March 2014 bonus issue and share capital consolidation

(see note 10).

During the six months ended 30 June 2014, the Group recognised a charge in respect of long term employee incentive costs of £2.5 million (half year ended 30 June 2013: £0.6 million; year ended 31 December 2013: £1.7m). This charge is in respect of the Group's option schemes, the Joint Share Ownership Plan ("JSOP"), the JUST EAT Share Incentive Plan ("SIP") and related employer's national insurance (or local equivalent). During the six months ended 30 June 2014 the following awards over shares in the Company were granted under the Group's long term employee incentive plans:

5. Exceptional items

The IPO costs incurred during the six months ended 30 June 2014 related to the Company's listing on the London Stock Exchange in April 2014. Further information is provided in note 10.

6. Other gains

For the half year ended 30 June 2013, the gain of £3.1 million related to the profit on the deemed disposal of the Group's joint venture interest in Eat.ch GmbH, when it became a subsidiary in January 2013. The gain for the year ended 31 December 2013 was £3.4m. In addition to the profit in respect of Eat.ch GmbH, this included a profit of £0.3m on the deemed disposal of Achindra Online Marketing Private Limited, the Group's subsidiary in India, when it became an associated undertaking in November 2013.

7. Taxation

The income tax expense was recognised based on management's best estimate of the annual income tax rate expected for each jurisdiction for the full financial year, applied to the profit before tax for the half year ended 30 June 2014, on a jurisdiction by jurisdiction basis. The Group's consolidated effective tax rate for the half year ended 30 June 2014 was 30.2% (half year ended 30 June 2013: 35.5%; year ended 31 December 2013: 33.3%). The difference between the standard rate and the effective rate at 30 June 2014 was attributable to disallowable expenditure and unrecognised tax losses.

The net deferred tax asset recognised as at 30 June 2014 was £0.4 million (30 June 2013: £0.7 million; 31 December 2013: £0.5 million). This was made up of deferred tax assets relating primarily relating to equity settled shared-based incentives, acquired intangible assets and tax losses recognised on consolidation totalling £1.2 million (30 June 2013: £1.4 million; 31 December 2013: £0.9 million), and deferred tax liabilities arising on acquired intangibles totalling £0.8 million (30 June 2013: £0.7 million; 31 December 2013: £0.4 million).

There was a net unrecognised deferred tax asset of £8.6 million as at 30 June 2014 (30 June 2013: £7.1 million; 31 December 2013: £7.6 million) primarily relating to unrecognised tax losses.

8. Earnings per share

Basic earnings per share was calculated by dividing the profit for the period attributable to the shareholders of the Company by the weighted average number of Ordinary shares and B Ordinary shares outstanding during the period, excluding unvested shares held pursuant to the Group's JSOP and SIP.

Prior to the 8 April 2014, holders of the B Ordinary Shares had rights to share in profits which differed to those of the holders of Ordinary shares, Preference A shares, Preference B shares and Preference C shares. Earnings per share figures have therefore been presented separately for the B Ordinary shares, up until 8 April 2014. The B Ordinary Shares, Preference A shares, Preference B shares and Preference C shares were reclassified as Ordinary Shares on 8 April 2014.

Diluted earnings per share was calculated by adjusting the weighted average number of Ordinary shares and B Ordinary shares outstanding to assume conversion of all potentially dilutive shares. The Group has potentially dilutive shares in the form of share options, warrants and unvested shares held pursuant to the Group's JSOP and SIP.

Adjusted earnings per share is the main measure of earnings per share used by the Group and is calculated using underlying profit attributable to the holders of Ordinary shares in the parent, which is defined as profit attributable to the holders of Ordinary shares in the parent, before long term employee incentive costs, exceptional items, 'other gains and losses' (being profits or losses on the disposal of operations), foreign currency translation differences and the tax impact of the adjusting items.

Basic and diluted earnings per share have been calculated as follows:

9. Dividends

On 2 April 2014, the Directors declared a dividend of £18.25 million (30 June 2013: £nil, 31 December 2013: £nil), to be paid to the holders of Preference A shares, Preference B shares, Preference C shares and Ordinary shares pro rata to their holding of shares in the Company. The dividend was paid, on 8 April 2014, immediately prior to the reclassification of Preference A shares, Preference B shares and Preference C shares as Ordinary shares (see note 10).

10. Share capital and share premium account

On 20 March 2014 the Company's share premium account was reduced by £40.0 million by way of a reduction of capital. On the same day the Company conducted a bonus issue of 2,699 shares for every one Ordinary share, B Ordinary share, Preference A share, Preference B share and Preference C share in issue. This was followed by a consolidation of each of the Ordinary shares, B Ordinary shares, Preference A shares, Preference B shares and Preference C shares such that the nominal value of each share increased from £0.0001 to £0.01.

On 24 March 2014 the Company re-registered as JUST EAT plc.

On 8 April 2014 the Company's Ordinary shares were admitted to the High Growth Segment of the Main Market of the London Stock Exchange (the "Listing"). In conjunction, the Company made an initial public offering ("IPO") of 38.5 million new one pence Ordinary shares at a price of 260 pence per share. Also on this date, immediately prior to the Listing, 29.8 million B Ordinary shares, 134.3 million Preference A shares, 48.8 million Preference B shares and 67.6 million Preference C shares converted to Ordinary shares.

Costs that related directly to the issue of new shares have been deducted from the share premium account. IPO costs that related to both the Listing and issue of new shares have been allocated between the share premium account and the income statement in proportion to the number of primary and secondary shares traded on admission. As a result, during the six months ended 30 June 2014, IPO costs totalling £4.5 million have been charged to the share premium account and IPO costs of £2.3 million have been charged to the income statement. IPO costs of £1.4 million were charged to the income statement during the year ended 31 December 2013.

On 6 May 2014 the Company's shares were admitted to trading on the premium listing segment of the Official List of the UK Financial Conduct Authority. This change had no effect on the issued share capital of the Company.

11. Acquisition of business

On 27 February 2014, the Group acquired the entire share capital of Meal2Order.com Limited ('Meal2Go') for cash consideration totalling £3.7 million, including the repayment of loans from the selling shareholders, of £0.7 million. The Group obtained control of Meal2Go and as a result the acquisition has been accounted for as a business combination in accordance with IFRS 3.

On acquisition Meal2Go's business was transferred to Just Eat.co.uk Limited, from which time it was not possible to track separately the results of Meal2Go. As result we are unable to disclose the post-acquisition contribution of Meal2Go.

12. Net cash inflow from operating activities

13. Financial instruments

Fair values

Set out below is a comparison of the carrying amounts and fair values of financial assets and liabilities:

The fair values of financial assets and financial liabilities were determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

All the Group's financial assets and financial liabilities were classified as Level 1, except for provisions for liabilities which were classified as Level 3. There were no material movements in the balance of provisions for liabilities in the period.

There were no transfers between the levels during either period presented.