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Just Eat Takeaway Considers Selling Grubhub After Massive Investor Pressure

Just Eat Takeaway Considers Selling Grubhub As Falling Stock Prices And Orders Put Increasing Pressure On Investors

  • US-based Grubhub was bought by Just Eat for £5.75 billion less than 12 months ago
  • Just Eat Takeaway shares have plummeted over 70% over the past 12 months
  • Just Eat doesn’t expect to post an underlying full-year profit until next year

Just Eat Takeaway could sell Grubhub after pressure from some investors to boost the company’s valuation.

The bosses of the online grocery delivery service told investors on Wednesday that they are “actively evaluating” whether to go through with a full or partial sale of the US-based subsidiary it acquired less than 12 months ago for £5.75 billion to have.

When this deal was completed, the company benefited from a massive surge in demand for takeaway food, triggered by the Covid-19 pandemic and resulting lockdowns.

Delivery Boom: Just Eat has benefited from a huge surge in demand for takeaway food, triggered by the Covid-19 pandemic and resulting lockdowns

Soon after, one of its largest shareholders, Cat Rock Capital, accused the group of poor communication with investors, urging it to pursue a possible merger and divest non-core assets.

The Amsterdam-based company had previously resisted calls to sell Grubhub, but investor pressure remained as the value of its shares continued to fall, falling more than 70 percent in the past year.

Today JustEat said it was actively evaluating the introduction of a strategic partner in and/or the sale of part or all of Grubhub, although it warned there was “no certainty” if or when an agreement would happen.

Alongside this, it was revealed that the volume of orders processed on its platform fell only slightly to 264.1 million in the first three months of 2022, despite the easing of lockdown restrictions.

Higher average orders from patrons drove the total value of these purchases up 4 percent to €7.24 billion, with Northern Europe and the British Isles each reporting increases of over €100 million.

The company expects current-quarter growth “to remain challenging,” but expects the number of returning customers and average monthly orders to be at least above pre-pandemic levels.

Results:

Results: “After two years of exceptional growth, we are maintaining the same high level of orders processed during the Covid-19 restrictions,” said Jitse Groen, CEO of Just Eat (pictured).

However, JustEat has lowered its forecast for gross transaction value for this year and doesn’t expect underlying full-year profit until next year.

Chief Executive Jitse Groen said: “After two years of exceptional growth, we are maintaining the same high volume of orders processed during the Covid-19 restrictions.

“Our priority for 2022 is to increase profitability and strengthen our business. We expect profitability to gradually improve over the year and return to positive Adjusted EBITDA in 2023.’

JustEat’s losses surged to over $1B in 2021

Much of the additional cost came from raising salaries for staff and couriers, processing orders and marketing spend related to the Grubhub purchase and sponsorship of the 2020 UEFA European Football Championship.

Profitability was further impacted by the company’s decision to offer voluntary discounts and the imposition of mandatory caps on delivery charges in many parts of North America, as well as short-term reductions in delivery charges in the UK and Ireland.

Still, Groen claimed in March that the group’s losses peaked in the first half of last year and are “quickly heading to profitability” due to its expansion strategy.

Just Eat Takeaway Stocks closed Wednesday’s trading up 2.1 percent at 2,217.5 pence.

Decline: Just Eat Takeaway has seen the value of its shares plummet by over 70 percent over the past year, despite the Covid-19 pandemic leading to a surge in orders on its platform

Decline: Just Eat Takeaway has seen the value of its shares plummet by over 70 percent over the past year, despite the Covid-19 pandemic leading to a surge in orders on its platform

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Just Eat Takeaway Considers Selling Grubhub After Massive Investor Pressure

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