Just Eat upgrades forecasts after hiking restaurant commissions

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Charging restaurants more to appear on its online takeaway portal should help Just Eat’s sales rise almost 45% this year, its management said today.

The company said it expects full-year revenue to hit £358 million, versus 2015’s £247.6 million and the £350 million it previously forecast.

Underlying EBITDA (earnings before interest, tax, depreciation and amortisation) for the full year was put at between £102 million and £104 million, up from last year’s £59.7 million and the previous guidance of £98 million to £100 million.

The upgrade follows last month’s one percentage point increase in commissions paid by participating restaurants in the UK and a switch to weekly payments from twice monthly invoices.

“The initial response to these changes has been positive,” it said.

The company also revealed it took 31.5 million orders in the first three months of the year, a 57% increase on the year before.

Its overseas push, including acquisitions in Italy, Brazil and Mexico, was “going well”, it added. Just Eat has been trying to expand beyond the UK, which generates most of its business. Orders in Britain, where it faces increasing competition from the likes of Deliveroo, grew by 40%.

“We have had an excellent start to 2016 and I am delighted with the Company’s performance and the momentum in the business, said boss David Buttress.

Just Eat shares rose 28.8p, or more than 7.5%, to 412.5p.

Source Article from http://www.standard.co.uk/business/just-eat-upgrades-forecasts-after-hiking-restaurant-commissions-a3238471.html

May 3, 2016 |
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