Shares in Just Eat Takeaway jumped on Wednesday after the online food delivery business swung to a small profit in 2022 and said it expected further growth this year.
Higher prices and delivery costs helped Europe’s biggest food delivery group generate €16mn in adjusted earnings in 2022, compared with a €350mn loss in 2021.
The return to profitability comes a year ahead of analysts’ expectations. JET also predicted a large rise in adjusted earnings to €225mn in 2023, sending London-listed shares as high as 15 per cent in morning trading.
Food delivery businesses grew rapidly during the pandemic as locked-down customers resorted to ordering takeaways.
But rising food prices and cost of living pressures hit the sector in 2022. In response, JET has raised prices and delivery fees, as well as cutting costs, which helped offset a 9 per cent fall in orders in 2022 compared with the previous year.
Jitse Groen, chief executive at JET, said consumers had continued to order online despite rising living costs.
“Countries like Holland and Germany are pretty rich. Obviously everybody’s annoyed that the electricity bills are going up but it’s not . . . that they cannot afford to order a takeaway every other week or every month,” he said on Wednesday.
The business benefited from a slight increase in orders during the World Cup, Groen added.
Groen said it was continuing to explore the sale of Grubhub, the US business it bought at the height of the lockdown-driven food delivery boom in 2020 for $7.3bn, after the company bowed to pressure from activist investors.
However, he said the sale was proving “a very difficult process”, adding that “there’s just not a lot of people with money anymore. Maybe that sounds a bit dramatic but that’s the fact.”
In August, JET announced it had sold its one-third stake in Latin American delivery app business iFood in a deal worth €1.8bn, as part of its plan to cut costs.
Analysts at Citi said JET’s guidance “seems conservative when considering the current run-rate” after the business pivoted quickly to profitability in the second half of the year.
The business generated €150mn in adjusted earnings in the second half of 2022, compared with adjusted losses of €134mn in the first half of the year.