Just Eat Slides as Growth Eases for U.K. Online Takeout Serviceby
Order growth slips as thriving market becomes more crowded
Update provides ‘reality check,’ Jefferies analyst says
Food orders at Just Eat Plc, the U.K.’s largest restaurant food delivery service, slowed at the back end of last year amid rising competition, causing shares to slide at a company known for its stellar growth rates.
Like-for-like orders rose 36 percent in the twelve months to Dec. 31, Just Eat said Tuesday, less than the 38 percent gain reported by the company for the first nine months of the year. The shares fell as much as 7 percent, the most in almost seven months.
Growth is easing as the thriving U.K. food-delivery market becomes increasingly crowded. Amazon.com Inc. extended its U.S. restaurant delivery service to London in September, joining rivals Uber Technologies Inc. and Deliveroo. Just Eat is seeking to extend its business beyond the U.K., acquiring businesses in Canada, Australia and Mexico since 2015.
“No real knocks to the thesis,” David Reynolds, analyst at Jefferies, said in a note, “just a reality check as the guidance-upgrade conveyor belt comes to a stop.”
The company also highlighted full-year U.K. orders for the first time, which increased 31 percent over 2016.
David Buttress, chief executive officer at Just Eat, said the order growth “puts us in a strong position to deliver full-year results in line with our previous financial guidance.”
Including orders from Just Eat’s Mexican and Australian businesses, acquired in 2015, deliveries increased 42 percent over 2016, down from 57 percent for 2015.