(Alliance News) - Just Eat PLC, which is currently in early talks for a merger, on Wednesday posted a sharp drop in profit due to planned investment.
Just Eat on Monday confirmed a preliminary all-share merger agreement with Dutch peer Takeaway.com, creating a takeaway platform with annual orders of EUR7.3 billion in 2018.
For the six months to June, Just Eat's pretax profit slumped to GBP800,000, from GBP48.1 million the year before, which the firm said was due to planned spending on its delivery and iFood offerings.
Just Eat has a 33% stake in iFood, a "hybrid" marketplace for takeaway food in Brazil and Mexico.
Revenue surged, however, by 30% to GBP464.5 million, with orders rising 21% to 123.8 million. Some two million new net customers joined during the half.
Europe did well, Just Eat continued, with Canada posting a profit in the half and Australia returning to order and revenue growth.
Interim Chief Executive Peter Duffy said: "We've been working at pace and made good progress in the first half of the year to become the preferred food delivery app for our customers, with a broader choice of restaurants, a better user experience and a more personalised and impactful approach to communication.
"Performance in our UK business strengthened in the second quarter, our Canadian and European businesses are performing well and Australia has returned to top line growth with our delivery operations achieving gross profitability. These are strong foundations for Just Eat to build on, as the business continues to drive forward."
Looking ahead, Just Eat is confident on meeting 2019 revenue guidance of between GBP1 billion and GBP1.1 billion, with underlying earnings before interest, tax, depreciation, and amortisation guided between GBP185 million and GBP205 million.
In 2018, Just Eat's underlying Ebitda was GBP173.9 million on revenue of GBP779.5 million.
The company didn't mention its proposed Dutch merger in its statement on Wednesday.
Shares were 1.9% higher on Wednesday morning in London at a price of 764.20 pence each.
