Just Eat slashes profit guidance for year and mulls sale of Grubhub
Just Eat has said it has lowered its profit guidance for the year and is mulling the sale of its US arm Grubhub.
The delivery service said that “management is currently, together with its advisers, actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub.”
“There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be,” JustEat added.
The firm said it aims to reach positive adjusted EBITDA for the full year 2023, after continuing the same level of orders during lockdown restrictions.
In a quarterly update, Just Eat Takeaway.com said it processed 264 million orders, roughly flat compared with the same period in 2021.
However, the delivery service said gross transaction value (GTV) would grow by mid-single digit year-on-year in 2022. This had previously been mid-teens.
Guidance was also lowered for 2022 adjusted EBITDA margin, to a range of minus 0.5 per cent to minus 0.7 per cent of GTV. Guidance had previously been for minus 0.6 per cent to minus 0.8 per cent.
Jitse Groen, CEO of Just Eat Takeaway.com said: “After two years of exceptional growth, we maintain the same high level of orders that were processed during the Covid-19 restrictions.
“Our priority for 2022 lies in enhancing profitability and strengthening our business. We expect profitability to gradually improve throughout the year, and to return to positive adjusted EBITDA in 2023.”
Higher average transaction values in the first quarter saw GTV total €7.2bn, up four per cent compared with the same period of 2021.
The company acknowledged on Wednesday that it had benefited from a “rapidly increasing consumer base in a short period of time,” during the first lockdown measures in 2020.
This meant Just Eat “temporarily experiences a corresponding higher-than-normal absolute churn level in the first half of 2022, despite a lower relative churn level of this new consumer group versus pre-pandemic cohorts.”
Growth in the second quarter of the year would therefore remain challenging, the company said.
Ruth Griffin, retail partner at the law firm Gowling WLG, said: “This is a salient reminder to businesses of the challenges they may face when looking to expand via international acquisition and how their corporate strategy could impact on their attractiveness to investors.”