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Just Eat shares are up just shy of 4% after the online food ordering company delivered a smorgasbord of positive Q1 results. Investors are gobbling up news of a 49% jump in Q1 revenues, helped by strong order growth (+32% YoY to 51.6M orders) both in UK (+24%) and overseas (+46%).
Investors are clearly ignoring concerns about spending to bolster delivery capabilities, which could yet risk dragging Just Eat into an intense price competition with rivals such as Uber Eats and Deliveroo, at the expense of profit margins. At this early stage, reiterated conservative full-year revenue guidance (in £660-700M range) also offers the chance of an upwards revision later in the year.
Even stripping out the hungryhouse.co.uk acquisition, which flattered Q1’s orders by 1.4M, growth of 32% only falls to 28/29%. Which still represents an acceleration on full-year 2017 order growth of 26%, to match the 29% level seen in Q3 2017, the strongest of the year.
Artjom Hatsaturjants, Research Analyst, 1 May 2018
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