What has happened?
Just Eat lost £600 million in stock market value and fell 14% to become biggest early faller in the FTSE 100, after reporting a loss of £76 million accross 2017 (as opposed to a £91 million profit last year).
New CEO Peter Plumb has also announced plans to expand Just Eat’s own delivery service to exploit what is believed to represent an £18 billion market opportunity.
The loss relates to a £180 million impairment charge in Australia, on the carrying value of goodwill after the takeaway platform’s acquisition of the Menulog brand in 2015.
Is it all that bad?
No, if the financials are to go by bosses have little to worry about.
Group revenues grew 42%, total orders increased 26% and the UK alone - the biggest independant market - delivered £304 million in revenue.
The fact that it has overpaid for a previous acquisition (Menulog) isn’t really that detrimental, it's not an operating loss merely a correction to their balancing sheet.
That being said, it is rather embarressing to have to admit to overpaying and of course there are only so many times you can continue to post a loss.
Investors are more likely concerned with the increased competition, especially in Australia where the majority of customers are spread between just two cities. There may also be nervousness around the planned £50 million investment as it’s not guaranteed to pay-off.
Surpise is the real driver of sudden stockmarket movements and the initial loss in shares - which has since marginally recovered - reflects a shock reaction to the profit loss. The company looks healthy so bosses won’t be yearning for the comfort takeaway pizza yet.
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