LONDON BRIEFING: Just Eat Takeaway loss widens despite pandemic boom

(Alliance News) - Just Eat on Wednesday reported a big jump in revenue in 2020, but ...

Alliance News 10 March, 2021 | 8:26AM
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(Alliance News) - Just Eat on Wednesday reported a big jump in revenue in 2020, but losses still grew during what was an "exceptional year" for the new food delivery tie-up.

The company was formed after Just Eat PLC and NV merged in 2020. won a bidding war for Just Eat in January 2020, fending off interest from Johannesburg and Amsterdam-listed media and internet investor Prosus NV.

In 2020, Just Eat's revenue surged almost five-fold to EUR2.04 billion from the EUR416 million alone registered in 2019.

Revenue was largely boosted by the merger, though Just Eat was also helped by increased demand for its services as lockdowns meant restaurants, pubs and bars were unable to provide in-person dining for much of 2020.

The company posted a widened loss, however. Its pretax loss stretched to EUR147 million from the EUR88 million incurred by in 2019.

There were hefty rises in courier costs, to EUR712 million from EUR70 million and order processing costs, which surged to EUR193 million from EUR41 million. Staff expenses more than quadrupled to EUR464 million from EUR112 million.

The Just Eat Takeaway results echo those unveiled by rival Deliveroo as part of disclosures for its upcoming initial public offering. Deliveroo reported an underlying loss for 2020 of GBP223.7 million, narrowed from GBP317.3 million in 2019. The loss was despite gross transaction value improving by 64% to GBP4.1 billion last year.

Just Eat Takeaway also provided earnings figures on a "combined basis". The company's merger was completed in April 2020 and the unaudited combined figures are adjusted to assume the deal was sealed at the start of 2019.

Combined revenue was up 54% to EUR2.40 billion and its adjusted earnings before interest, tax, depreciation and amortisation rose 18% to EUR256 million.

On a combined basis, the number of active customers rose 23% to 60 million in 2020 and orders jumped 42% to 588 million.

"2020 was an exceptional year for Just Eat Right before the completion of the merger between Just Eat and, the world was hit by Covid-19. This brought unprecedented challenges to our restaurants, consumers as well as to our organisation and staff, but it also created tailwinds for our business. In the second half of the year, we increased our investments into the legacy Just Eat business significantly, building on our position as one of the largest food delivery companies in the world," Chief Executive Officer Jitse Groen said.

UK orders were 35% higher at 179 million, while orders in Germany jumped 62% to 112 million. In Canada, orders were 78% higher at 86 million and in the Netherlands, they rose 30% to 49 million.

"We expect a further acceleration of our order growth in 2021 compared with last year," Groen added.

The company will not provide an earnings outlook, however.

Just Eat said: "We will prioritise market share over adjusted Ebitda and expect a further acceleration of our order growth in 2021 compared with 2020. Given the material impact of combining with Grubhub Inc on our plans for 2021 and the ongoing integration between legacy Just Eat and business, we are not providing an outlook."

The Anglo-Dutch meal delivery firm in June 2020 struck a USD7.3 billion deal to buy US peer Grubhub. It will form the largest food delivery firm outside of China.

Just Eat Takeaway shares were down 0.2% early Wednesday.

Here is what you need to know at the London market open:




FTSE 100: down 0.5% at 6,700.36


Hang Seng: up 0.4% at 28,873.23

Nikkei 225: closed flat at 29,036.56

DJIA: closed up 30.30 points, or 0.1%, at 31,832.74

S&P 500: closed up 54.09 points, or 1.4%, at 3,875.44


EUR: flat at USD1.1885 (USD1.1888)

GBP: down at USD1.3880 (USD1.3900)

USD: flat at JPY108.72 (JPY108.70)

Gold: up at USD1,715.49 per ounce (USD1,713.01)

Oil (Brent): down at USD66.90 a barrel (USD68.20)

(changes since previous London equities close)




Wednesday's Key Economic Events still to come

0830 EST US consumer price index

1030 EST US EIA weekly petroleum status report


China and the US are in talks to hold a potential meeting of their foreign ministers in Alaska, the South China Morning Post reported. Amid tension between Beijing and Washington, it would be the first high-level contact between the two governments since US President Joe Biden took office in January. Both the Chinese Communist Party's highest-ranking foreign policy official Yang Jiechi and Foreign Minister Wang Yi - who is technically Yang's subordinate - could potentially take part in a meeting with US Secretary of State Antony Blinken, according to the newspaper. The potential venue is the Alaskan city of Anchorage, which lies halfway between Beijing and Washington - and far from the attention of international media.










Legal & General reported a "resilient" performance in 2020 and a good start to its five-year plan. Operating profit for 2020 edged down to GBP2.22 billion from GBP2.29 billion the year before, with pretax profit attributable to equity holders down 15% to GBP1.79 billion. The provider of investment management, life assurance and pension services delivered financial metrics in line with its five-year targets despite the pandemic. Cash generation of GBP1.54 billion and capital generation from continuing operations of GBP1.5 billion were both consistent with L&G's goals of GBP8 billion to GBP9 billion over five years. Legal & General's full-year payout was flat at 17.57p, on track for its five-year cumulative dividend ambition of GBP5.6 billion to GBP5.9 billion.


Spirax-Sarco Engineering said its fourth quarter was better than expected, with full-year profit nudging up. Revenue for 2020 fell 4% to GBP1.19 billion, though pretax profit edged up 1% to GBP240.1 million, as the thermal energy management and pumping firm's operating profit margin improved to 20.9% from 19.7%. Spirax-Sarco reported strong organic sales and profit growth in Watson-Marlow, while organic sales for Steam Specialties declined broadly in line with industrial production across its global markets. In Electric Thermal Solutions, organic sales fell 12%. The latter two divisions still performed robustly given challenging market conditions, the company said. It said growth in Watson-Marlow was driven by the Pharmaceutical & Biotechnology sector, where demand accelerated due to Covid-19 vaccine development and production. Spirax-Sarco raised its dividend for the year by 7% to 118.0p.




Infrastructure construction firm Balfour Beatty reported a fall in profit for 2020, though did propose a final dividend. Revenue for 2020 rose to GBP8.59 billion from GBP8.41 billion, though pretax profit tumbled to GBP48 million from GBP138 million. The company said the significant fall in profit was due to a combination of the pandemic, a reassessment of end-of-contract forecasts in Construction Services, and the decision to defer any disposals from Infrastructure Investments, given prevailing market conditions. The company recommended a dividend of 1.5p per share for 2020, having paid no interim dividend. This compares to 2.1p paid for 2019. Balfour has also decided to extend its share buyback programme to GBP150 million for 2021. Balfour said its operations recovered steadily through the second half of 2020, and expects that Construction Services and Support Services will deliver underlying profit from operations in 2021 in line with 2019.


Casual dining chain owner Restaurant Group said its performance was encouraging in 2020 when its outlets were allowed to trade, but its loss for the year deepened substantially. Separately, the company unveiled plans for a GBP175 million capital raise. Revenue for 2020 more than halved to GBP459.8 million from GBP1.07 billion in 2019, while the owner of pan-Asian brand Wagamama posted a pretax loss of GBP127.6 million, widened from a GBP37.3 million loss the year before. The company said that the pandemic and associated restrictions are likely to hit its ability to reduce leverage organically or support selective growth opportunities in the medium term. As a result, it proposed a GBP175 million capital raise. The funds will be raised via a firm placing of 95.3 million shares and a placing and open offer of 79.7 million shares. The fundraise will be priced at 100 pence per share, which the company said marked an 11% discount to Tuesday's closing middle market price of 111.7p.




The collapse of UK finance firm Greensill has sparked panic and threatened 50,000 jobs, in particular at the sprawling steel empire of Anglo-Indian billionaire Sanjeev Gupta. Greensill specialised in short-term corporate loans via a complex and opaque business model that ultimately sparked its declaration of insolvency on Monday. The bankruptcy marks a major fall from grace for a company that won a key USD1.5-billion investment from Japan's SoftBank Group in 2019 – and employs former UK Prime Minister David Cameron as advisor. Greensill's failure has put 50,000 jobs at risk, both at the London-headquartered group and across its customer base. One that could be hit hardest is Gupta's GFG Alliance empire, which has 35,000 staff worldwide, including in Britain where its Liberty Steel division employs 5,000 people.


Wednesday's Shareholder Meetings

Titon Holdings PLC - AGM

Inspirit Energy Holdings PLC - AGM

Northamber PLC - AGM

Titon Holdings PLC - AGM

Blackrock Income & Growth Investment Trust PLC - AGM

Union Jack Oil PLC - GM re share consolidation

LXi REIT PLC - GM re fundraising

Martin Currie Global Portfolio Trust PLC - GM re shares issue

Personal Assets Trust PLC - GM re share issue


By Tom Waite;

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Spirax-Sarco Engineering PLC 13,595.00 GBX 0.93 -
Aston Martin Lagonda Global Holdings PLC Ordinary Shares 1,957.50 GBX -0.05 -
Just Eat NV 6,526.00 GBX 0.97
Just Eat NV 75.96 EUR 1.25

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