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Just Eat's shares rise as cost cuts offset falling orders

Olivier Sorgho
Updated ·2-min read
FILE PHOTO: Delivery workers of Just Eat Takeaway strike throughout France

By Olivier Sorgho

(Reuters) -Just Eat Takeaway.com swung to a better-than-expected core profit in the first half of the year, sending its shares up more than 4%, as cost cuts offset a drop in home delivery meal orders by inflation-hit customers.

Europe's biggest meal delivery company also said on Wednesday its finance chief Brent Wissink would step down in May next year to "pursue other opportunities".

Food deliveries boomed during pandemic lockdowns but firms are now cutting costs to boost profits as cash-strapped consumers rein in spending on non-essential items such as takeaways.

"Food delivery needs to grow up and needs to generate profits," CEO Jitse Groen said in a call with analysts. "There was a time when money was free and we could all invest in the growth of our business, that time is now behind us."

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Just Eat's January-June orders fell 12% to 450 million, in line with market forecasts according to JPMorgan analysts.

It posted adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 143 million euros ($158 million), against a loss of 134 million a year earlier.

Analysts at Jefferies and Barclays said this was well ahead of consensus expectations.

Just Eat credited improved efficiencies in its delivery operations and general cost cuts for the stronger earnings.

In Britain, the group has laid off staff and is transitioning to a self-employed model that doesn't offer drivers benefits like paid sick leave. Groen has in the past criticised the model for creating "precarious" working conditions.

Just Eat reaffirmed its financial targets, including 2023 adjusted EBITDA of around 275 million euros. JPMorgan said investors would likely see this as "conservative", given the core profit beat.

The group also said it was still exploring a partial or full sale of its struggling U.S.-unit Grubhub, but added there was no certainty a deal would happen.

($1 = 0.9050 euros)

(Reporting by Olivier Sorgho in Gdansk; Editing by Milla Nissi, Kirsten Donovan)