The Needle On The Digital Food Marketplace Stock - Just Eat (JE)

Just Eat Plc is a UK-based leading industry player in the online marketplace for takeaway food delivery. It operates through two subsidiaries including Just Eat Holding Limited and Just Eat Central Holdings Limited. The company has around 97,500 restaurant partners connected to around 24 million active customers across 13 countries in the UK, Australia, New Zealand, established markets and developing markets. The established markets comprise Canada, France, Ireland, Switzerland, Benelux, Denmark and Norway while the developing markets include Mexico, Italy, and Spain.

The GBP6.2 billion restaurant-delivery market, as of 2017, in the UK has been expanding continuously. Moreover, Just Eat believes 2018 to have been a good financial year, and the company is expecting to report a 43% growth in annual revenue to GBP780 million from GBP546.3 million in 2017. The expected underlying earnings for 2018, excluding interest, taxation, depreciation, and amortization, is between GBP172 million and GBP174 million, up from GBP164 million in 2017. The number of orders is also estimated to be risen to 221 million from 172 million in 2017.

Just Eat predicts that its strong position will be able to generate revenues surpassing GBP1 billion in 2019, where in its Canadian business, SkipTheDishes, is also expected to file first full year profit. The company is aiming to reinvest increased profits to accelerate growth through new initiatives specifically in the UK and Australia. The focus remains on increasing customer base in key zones.

In an attempt to bolster its market presence and scale up, Just Eat recently announced acquisition of Flyt, a software platform start-up, for approximately GBP22 million. The company generates more than half of its revenue from UK alone, but experienced a decline of 26% in its shares in 2018. So, the move is a step in the right direction to sustain globally rising competitive bar, expand and diversify the type of services and have a distinguished approach. Moreover, with growing pressure from investors, Just Eat is focussing on technological innovation to stand out in the food-delivery space. According to Flyt, incorporating their technology into the POS systems will remove human error in order processing and reduce wait times.

In addition, Just Eat has also launched “bottomless brunch” delivery with free top-ups, for which the company has collaborated with London-based chicken joint Drum & Flats to celebrate Just Eat’s alliance with Boxpark Wembley.

Just Eat (JE) is a mid-cap stock valued at GBP4.9 billion on the London Stock Exchange. In December 2018, the food delivery company was dropped out of FTSE 100 after its share value fell by about 40 per cent from GBP 883.4 in July to GBP 533.8 in November as it continued investments in delivery services amidst profit warnings.

Recently, the Capital Group, a US fund manager increased its stake in Just Eat from 5.07 percent to 10.46 per cent.               On January 30, 2019, JE shares were trading low at GBP710.40, down by 1.6% by mid-day trading while the group closed the trading at GBP722.20 the previous day.