Je bottom paragraph sell recomend31 Mar 2015 14:52
Rather than rummaging through a stack of takeaway menus, diners are turning to Just Eat (JE.) to order their pad thai or pizza. The market newcomer processed over 61m orders through its websites and apps last year, which drove underlying cash profit up 131 per cent to £32.6m.
Just Eat grew its network by about a quarter to 45,700 restaurants across a dozen countries. Together with hefty investments in sales, marketing and mobile technology, that helped boost its number of active users - those who ordered a takeaway in the past year - by 37 per cent to 8.1m. Arguably, the strongest gains were in the UK, where a hike in the commission rate and a 42 per cent rise in marketing outlay fuelled a two-thirds rise in sales to £114m.
The group forked out over £13m on seven acquisitions, and has made a further three purchases since the year-end. That has allowed it to grab a big slice of developing markets such as Brazil and Mexico, paving the way for further growth. Like-for-like orders outside of the UK and Denmark - Just Eat's core markets - rose by more than half last year, sending constant currency sales up 96 per cent.
Management expects turnover to exceed £200m this year. Broker JPMorgan Cazenove expects EPS of 5.8p, rising to 8.4p in 2016 (24.2p in 2014).
IC VIEW: 18th March
Just Eat has appetising growth prospects at home and abroad. But strip out cash and its shares trade on 40 times forecast earnings for 2016, which looks toppy even for the e-commerce sector. Downgrade to sell.
Last IC view Hold, 241p, 12 Aug 2014
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