Just Eat posts 2021 loss; might surrender majority in GrubHub

(Reuters) -Just Eat, Europe’s largest meal delivery company, reported a smaller-than-expected full-year core loss on Wednesday and upheld its growth targets for 2022 even as the effect of a pandemic-driven boost in online food ordering wanes.

FILE PHOTO: The app for Just Eat is displayed on a smartphone in this posed picture in London, Britain, August 5, 2019. REUTERS/Toby Melville GLOBAL BUSINESS WEEK AHEAD

Its shares, which have lost half of their value over the past year, rose 4.4% by 0817 GMT after the group reported a loss before interest, taxes, depreciation and amortization (EBITDA) before of 350 million euros ($389 million), better than the 366 million euro loss forecast by analysts.

After a year of heavy investment costs “we expect that our improved scale and position will strengthen ... our profitability going forward,” CEO Jitse Groen said on a press call.

Takeaway forecasts this year’s growth in Gross Transaction Value, a metric that combines order number and order value, in the “mid-teens.”

Revenue rose 33% to 5.33 billion euros in 2021.

“Overall these results are solid, with a much better profitability performance in the UK & Ireland and the US,” JPMorgan said in a note on the earnings.

The company reported an EBITDA profit of 363 million euros in 2020, when pandemic-related lockdowns created a windfall for food delivery and meal kit companies.

Groen said the company remains in talks on finding a partnership for GrubHub, which Takeaway bought for $7.3 billion in June. Investors have pushed for a disposal of the business, which competes with Uber and DoorDash. Groen said he would be “flexible” on terms as long as the business’s strategic position was strengthened.

Gubhub “is not the largest in the U.S. Many places are quite strong, but the national position is not and we need to improve that,” he said.

“Whether that’s going to be a minority share or majority position ... that’s not an ‘ask’ on our side.”

Groen said he foresees “rationalization” in Europe, where Takeaway competes with Delivery Hero and Deliveroo , in addition to a raft of grocery delivery startups such as Gorillas, Flink and Getir.

Takeaway itself announced it is exiting Norway and Portugal, where it lacks scale.

He said that while inflation is a problem for many companies, for Takeaway it helps as it increases order sizes - a factor in food ordering profitability that outweighs higher wage and delivery costs.

($1 = 0.8998 euros)

Reporting by Sarah Morland and Toby Sterling; Editing by Jacqueline Wong, Subhranshu Sahu and Tomasz Janowski