Just Eat exploring sale of Grubhub less than a year after acquisition
Just Eat is exploring a partial or full sale of Grubhub less than a year after its acquisition of the US-based food delivery platform.
In its results filed for the first quarter of 2022, Just Eat said management and advisers were "exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub".
It said that further announcements will be made "as and when appropriate". The £5.8b merger only completed in June 2021, creating the world's largest online food delivery company outside of China.
The group's orders fell by 1% in the quarter to 267.1 million compared to the same period last year, with its orders in North America hit the hardest, dropping by 5%.
Gross Transaction Value (GTV) amounted to €7.2b (£6b) in the first quarter of 2022, up 4% compared with the same period of 2021, driven by a higher average transaction value.
During the pandemic, the company benefitted from a rapidly increasing consumer base in a short period of time, adding more than 20 million active consumers since April 2020. It also said that growth in the second quarter of 2022 would "remain challenging", although order frequency and returning consumer numbers were expected to remain above pre-pandemic and pandemic levels.
The business updated its guidance for the full year – while previously GTV was expected to grow by mid-teens year-on-year, this has been updated to mid-single digit, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was previously expected to be between -0.6% to -0.8% of GTV, and has been updated to -0.5% to -0.7%. The group said its long-term objectives remained unchanged: for more than €30b (£25b) of GTV to be added over the next five years, and an EBITDA margin in excess of 5% of GTV.
It said enhancing profitability was one of its highest priorities for 2022, with a focus on increasing revenue per order, improving courier costs per order, and reducing overheads and operating expenses, with plans to reach positive adjusted EBITDA for the full year in 2023.
Jitse Groen, chief executive 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."
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