Just Eat Blames the Weather for Slowing Growth
(Bloomberg) -- Just Eat Plc stuttered in the face of pressure from its rivals and an activist shareholder, but stuck to its full-year revenue guidance.
Just Eat’s U.K. revenue increased 28 percent year-on-year over the first quarter, with its main U.K. orders growing just 7.4 percent. The company blamed the attrition of customers from its Hungryhouse acquisition, and warm weather in February.
Shares in Just Eat fell as much as 5 percent in early trading in London Friday.
The company still expects full year revenue of between 1 billion to 1.1 billion pounds ($1.29 billion to $1.4 billion), which matched estimates according to data compiled by Bloomberg.
The food delivery marketplace faces growing competition from Uber Eats and Deliveroo amid escalating talk of consolidation in the sector. Just Eat rejoined the FTSE 100 this year, but the company is battling against a growing Uber Eats, which is planning to launch a rival marketplace platform in the U.K., following Deliveroo’s entry in mid-2018.
Investor Cat Rock Capital Management LP has been lobbying for Just Eat to merge with a rival online meal-delivery company amid consolidation in the food delivery sector.
There is also continuing uncertainty about Just Eat’s leadership. Former Chief Executive Officer Peter Plumb stepped down in January, and CEO Peter Duffy previously ruled himself out of the running for the top job for personal reasons. There was no update on management changes in Friday’s trading update.
"Many of our international markets have performed very well in the period," said Duffy, "although, as expected, we saw softer U.K. order growth in the quarter."
Outside the U.K., orders grew by 40 percent to 29.5 million, driven by growth in Canada, Italy, Switzerland and Ireland. The pace of growth in Just Eat’s app downloads is also slower than that of Uber Eats, according to a research note from Bloomberg Intelligence.
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