Just Eat share price jumps 9% as it serves up sizzling profits

The newly-floated takeaway ordering platform delivered half-year profits up almost 300%, but shares are still below their listing price.

by Rachel Savage
Last Updated: 03 Nov 2014

Just Eat had a rocky start to life as a publicly listed company, floating at a wildly over-enthusiastic £1.5bn valuation in April, before its shares duly plummeted from 260p to as low as 197p in May (other newly IPO-d companies including Poundland, AO World and Boohoo.com haven’t done much better).

But the online takeaway ordering platform’s half-year results look to have gone some way to sating investors’ appetite, with shares soaring more than 9% to 240p in mid-morning trading as it delivered pre-tax profits up almost 300% from £3.1m to £8.6m.

The FTSE 250 company, which works with more than 40,000 takeaways in 13 countries, served up revenues of £69.8m, a rise of 58% on the first half of last year. The proportion of orders made on mobiles was more than 50% for the first time, while soggy winter weather helped UK revenues climb 69% to £51.9m, as people ordered food indoors rather than risking the rain.

Just Eat has its naysayers: MT columnist and serial entrepreneur Luke Johnson wrote back in April that its brokerage model (it takes 10-12% commission on orders) was unsustainable. That chimed with research commissioned by Preoday (which, not so incidentally, is trying to take on Just Eat with free apps for restaurants) in June that found two thirds of takeaway using the platform think its fees are unfair.

But if the company can keep delivering results like this, the doubters will be increasingly drowned out by a chorus of cheering shareholders. Best if it let up on the very un-lolz tweets though - one with the hashtag #XFactornutters was, quite rightly, deleted earlier today.

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