Just Eat Takeaway announces buyback as Europe leads profits beat

4:17 am Wednesday, July 31st, 2024

By Michal Aleksandrowicz

(Reuters) -Just Eat Takeaway reported a more than 40% jump in first-half core profit on Wednesday, led by its main European markets, announced a share buyback programme and said it was focused on using technology to cut costs further.

Europe’s biggest food delivery company by revenue posted half-year adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 203 million euros ($220 million).

A consensus of analysts had forecast 196 million euros.

Shares rose more than 10% in early trade before paring gains slightly.

In Northern Europe, gross transaction value (GTV) – a common metric for food delivery companies – increased by 5%. It also grew 6% in Britain and Ireland, although it fell 9% in North America, where the company had fewer orders and more competition.

Britain and Ireland’s adjusted EBITDA leapt by 64%, which CEO Jitse Groen said followed a shift to an in-house delivery platform.

It also jumped 57% in North America – despite a fee cap in New York City on how much it can charge restaurants for delivering meals.

The company reiterated its plans to sell all or part of its Grubhub unit in the United States, which it bought in 2020 and has been seeking to sell since 2022.

In northern Europe, however, adjusted EBITDA dropped 3% as the company invested in entering new cities, expanding existing delivery zones, and extending opening hours.

Groen said in a statement the overall improvement in GTV followed “growth of our partner base, expansion of our Delivery coverage and significant technological advancements”.

He also said the focus remained on reducing costs and using AI to reduce the workload at its call centre, while the company announced a share buyback programme of up to 150 million euros, citing its strong liquidity position.

It retained its annual core profit forecast announced in late February.

($1 = 0.9239 euros)

(Reporting by Michal Aleksandrowicz in Gdansk; Editing by Sonia Cheema, Mark Potter and Barbara Lewis)