Just Eat mulls Grubhub sale amid subdued Q1 orders
It comes as its board also downgraded its full-year expectations for 2022
Just Eat has confirmed it is considering a partial or full sale of Grubhub, as it downgraded its full-year growth expectations and saw orders in the first quarter of 2022 remain largely flat against last year.
While it maintained the “high level” of orders that were processed during the pandemic in the first quarter of last year, this quarter saw Just Eat Takeaway.com process 264 million orders, down by 1% against the same period in 2021.
Meanwhile, its board changed its annual growth expectations with new predictions that GTV will grow by “mid-single digit” year-on-year in 2022, down from a previous guidance of “mid-teens”.
In addition, it also expects a full-year adjusted EBITDA margin in the range of -0.5% to -0.7% of GTV, down from the previous guidance of -0.6% to -0.8%.
In its latest announcement, the food delivery giant said it was now “actively exploring” the introduction of a strategic partner into and/or the partial or full sale of Grubhub. It said this was in alignment with shareholders’ wishes in “wanting to both create and realise value from the company’s highly attractive portfolio of assets”.
Nonetheless, it said there was “no certainty that any such strategic actions will be agreed or what the timing of such agreements will be”.
Despite reporting largely flat orders, Gross Transaction Value (GTV) topped €7.2bn (£6bn) over the period, marking a 4% rise compared with the same period of 2021, which was largely driven by a higher Average Transaction Value.
Looking ahead, it expects growth in the second quarter of 2022 to remain challenging, yet believes key growth drivers, such as Average Monthly Order Frequency and Returning Consumers, are expected to remain above pre-pandemic or pandemic levels.
The group added that “enhancing profitability” will be one of its highest priorities in 2022, as it looks to focus on increasing revenue per order, improving courier costs per order, and reducing overheads and operating expenses. In light of this, it expects to reach positive adjusted EBITDA for the full-year 2023.
Jitse Groen, CEO of Just Eat Takeaway.com, said: “After two years of exceptional growth, we maintain the same high level of orders that were processed during the Covid-19 restrictions.
“Our priority for 2022 lies in enhancing profitability and strengthening our business. We expect profitability to gradually improve throughout the year, and to return to positive adjusted EBITDA in 2023.”
