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Just Eat predicts earnings growth in 2023 despite another drop in orders

Online food delivery giant Just Eat Takeaway.com has seen a worse-than-expected drop in orders over the Christmas quarter in a further sign of consumer spending woes.

The Amsterdam-based group said order numbers dropped by 12% to 239.8 million across the group and were down by 10% in the UK and Ireland, at 65.4 million.

Consumer spending has been affected by the cost-of-living crisis and there has been an ongoing slowdown in the online food sector, which is seeing growth ease back after a pandemic-driven boom in demand during 2020 and 2021.

But Just Eat confirmed it had returned to an underlying profit earlier than expected thanks to cost-cutting and said it expects to remain profitable in 2023.

It said it made around 16 million euros (£14.1 million) of underlying earnings in 2022, against losses of 350 million euros (£308 million) in 2021, after a bounce back in the second half.

In the final six months, cost-cutting helped drive underlying earnings of about 150 million euros (£131 million) – a big swing from the 134 million euro (£118 million) losses seen in the first half of the year.

Just Eat is guiding for underlying earnings of about 225 million euros (£198 million) in 2023, even taking account of pressures in the wider economy, though growth will be “skewed towards the end of the year”, it added.

Jitse Groen, chief executive of Just Eat Takeaway.com, said: “Our improved profitability and strong capital position strengthen our business for further growth.”

Its fourth quarter figures showed that order numbers were dragged lower by a 16% fall at its beleaguered US Grubhub division.

Facing activist pressure, Just Eat has been forced to consider a sale of Grubhub – a US delivery company that it bought in 2021.

In September last year, Just Eat said it had written down the value of Grubhub by three billion euros (£2.6 billion). It bought the firm for 7.3 billion US dollars (£5.9 billion).

Just Eat reiterated on Wednesday that it “continues to actively explore the partial or full sale” of Grubhub and will make further announcements “as and when appropriate”.

While order numbers dropped over the group’s final quarter, figures suggest customers are spending more in each order, with group-wide gross transaction value (GTV) holding up better, down by a more muted 2% to 7.11 billion euros (£6.3 billion).

In the UK, GTV fell 3% to 1.7 billion euros (£1.5 billion).

Over the year as a whole, total group GTV remained flat.