Just Eat sees revenue rise 21% - but UK market is a weak spot
Takeaway food order and delivery service Just Eat posted solid results for its most recent quarter last month that nonetheless suffered from a small weak spot: its domestic market in the UK. The company saw growth across the board, but the pace at which it is growing in the UK slowed from previous quarters – that, according to the company, is simply a reflection of “unseasonably warm weather” and other factors that mean comparable figures were overly strong.
Investors, who noted that the company is seeing increasing competition domestically, shaved a few percent off Just Eat’s share price on the back of slowed domestic growth.
Despite a slight post-earnings wobble, Just Eat’s share price is still up by more-than 22% year to date
Source: Yahoo Finance
Bad news first: in the first quarter of 2019, Just Eat’s UK order numbers increased by just 7.4%. That’s not exactly glacial, but it’s a far lower figure than the comparable quarter’s 24% increase last year (both of these figures reported, of course, on a year on year basis). Why the big drop off? According to Just Eat, a range of factors, such as unseasonably warm weather convincing more people to go out than they did a year ago (and, as a result, not order in takeaway), and Easter falling entirely in the second quarter this year.
The company said it expected better growth in the UK over the remainder of the year. And its international figures didn’t disappoint. Orders elsewhere rose by 40% over the three months (measured against the first quarter of 2018), with “Canada, Italy, Switzerland, and Ireland,” leading the way. This translated into global order growth of 21% against the same period in the previous year, while revenues rose 28% over the same period.
Peter Duffy, the company’s interim CEO, said: “Just Eat is on the right path to be the leading hybrid marketplace for online food delivery and we are confident in the delivery of our strategy. Many of our international markets have performed very well in the period although, as expected, we saw softer UK order growth in the quarter. We are making good progress and continue to execute at pace.”
Dominion holds Just Eat in its Global Trends Managed Fund.
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