Activist investor strikes upbeat tone as Just Eat interim boss rules himself out of the race
A major Just Eat shareholder who has pressed the company to merge with a rival today welcomed the takeaway giant’s interim boss decision to rule himself out of the race for a permanent chief executive.
Activist investor Cat Rock Capital Management, which owns a 1.7 per cent stake in Just Eat, said today that it appreciated Peter Duffy’s move to withdraw himself as a candidate to replace ousted chief executive Peter Plumb.
Read more: Just Eat profits jump but shares fall on 2019 outlook
Duffy said: "I am not a candidate in that process. I decided I don’t want to be a candidate in that process… for personal reasons."
In response, Cat Rock said today: "We respect and appreciate Peter Duffy’s decision to withdraw from the chief executive search process, allowing the board to secure a leader with the appropriate online food delivery experience.
""We believe that a merger with a well-run industry peer is a very attractive avenue for securing world-class leadership, delivery expertise, and a premium."
The comments come on the same day as Just Eat revealed a huge boost to profit and revenue in 2018, while also warning losses will impact 2019 earnings.
Read more: Just Eat profits jump but shares fall on 2019 outlook
Revenue rose 43 per cent year on year to £779.5m, while cashflow slipped six per cent to £157.3m after it snapped up rival Hungry House.
Profit before tax rose to £101.7m after a loss of £76m in 2017.
Reacting to that performance, Cat Rock claimed shareholders "should be under no illusions about the need for highly experienced leadership".
"Just Eat spent £21m on delivery in the UK and yet likely grew UK orders only high-single digits organically in the fourth quarter," the investor said.
"These are not 'strong results' that show that the status quo is 'working'. Instead, they only underscore the need for a world-class chief executive with online food delivery experience."
Such remarks follow on from Cat Rock’s efforts earlier this year to call for a tie-up for the online food delivery firm, which it argued "would be a far better outcome for shareholders than relying on the board to choose a new chief executive, particularly given the board’s poor record of chief executive selection".
Read more: Just Eat faces pressure as Cat Rock says investors back calls for merger
The calls from the US hedge fund come after Plumb surprised the City by revealing plans to step down after just 16 months at the helm of the company.
Plump's departure was announced on the back of growing pressure for the company’s board, which has struggled to compete with the likes of Uber Eats and Deliveroo in an increasingly squeezed online food order and delivery market.