Just Eat's first half revenues jump as orders rise

Just Eat, the online food delivery service, reported a successful first half on Thursday with orders increasing 55% and acquisition of more businesses in Europe and the Americas.

Revenue increased by 59% to £171.6m and underlying earnings before interest taxes depreciation and amortisation (EBITDA) was up 107% to £53.4m. Profit before tax increased 141% to £33.8m.

The increase in orders is a key driver of the firm’s group revenue growth, with order-driven revenues now accounting for 93% of total revenue. The firm’s technology platform processed 64.9m orders worth over £1.1b for its takeaway restaurants. The number of loyal customers that have used the service at least once before over the year has increased by 45% to 15.9m. Majority of orders take place via mobile devices, making up 70% of total orders. The average revenue per order (ARPO) increased by 5% to £2.47.

The platform has stretched its global outreach through its acquisitions of businesses in Italy, Brazil and Mexico on 5 February 2016 and Spain on 4 April 2016. This diversification into international markets has benefitted the firm by limiting the effect of the devaluation of sterling post Brexit. Out of the total revenue, 36% is in other currencies and international businesses are expected to generate a small net underlying EBITDA profit.

The UK market has also seen growth with revenue increasing by 44% and underlying EBITDA by 52%. Despite economic uncertainty, brought on by the EU referendum, consumer demand for online takeaway food has continued to thrive.

Chief executive David Buttress believes this progress will continue on into the future. “JUST EAT has made a very strong start to 2016. Our determination to enhance the JUST EAT service for both consumers and restaurants is paying off and gives us the confidence to increase our revenues and underlying EBITDA guidance for the full year as we continue to lead the sector," said Buttress.

As a result of its half year growth, the firm has raised its expectations for its end of year revenues from £358 to £368m, assuming current exchange rates remain stable. Of the £10m, £7m is a result of improved trading and £3m is due to changes in foreign currency exchange rates. Expectations for underlying EBITDA have increased from £102-£104 to£106-108m due to improved trading and investment in product, technology and marketing planned for the second half of 2016.

Basic earnings per share (EPS) is up 118% to 3.7p and Adjusted basic EPS is up 81% to 5.6p. Share price up 3.74% at 502p at 1133 BST on Thursday.

The online platform, founded in 2000 by Danish entrepreneur Jesper Buch has recruited 66,200 restaurant partners to date and services over 14.2m customers worldwide.