Just Eat orders soared due to lockdown restrictions
Just Eat Takeaway (LON:JET) confirmed on Wednesday that it anticipated additional growth in 2021 after an increase in orders due to the coronavirus pandemic allowed the company to meet its expectations for 2020.
Demand for food-delivery services soared by 42% to 588m orders during 2020 as lockdown restrictions kept customers away from restaurants.
Just Eat also expects to increase its market share in 2021 in the UK on the basis of an 88% increase in orders over January and February of this year.
The takeaway company’s sales increased by 54% to €2.4bn in 2020, in line with analysts’ expectations.
Just Eat’s EBITDA, also known as adjusted earnings before interest, taxes, depreciation and ammortization, rose to €256m, up from €217m the year before.
Dan Thomas, analyst at Third Bridge, said the pandemic created ideal conditions for Just Eat.
“The pandemic has created ideal business conditions for food delivery platforms and this is reflected in both strong order growth and restaurant onboarding for Just Eat Takeaway.”
“Just Eat Takeaway.com is currently sacrificing profitability in order to scale its UK delivery capabilities. Expansion may be coming at a considerable cost, but it remains a vital route to new customers in a fierce marketplace, where Deliveroo is poised to IPO,” Thomas added.
Just Eat has announced plans to last year to buy US-based app Grubhub in a $7.3bn (£5.8bn), making it the biggest food delivery company outside China.
The company also pushed up its investment in the second half of 2020, including its marketing push which involved paying a reported £5m to Snoop Dogg to appear in its TV adverts.
He added that the firm had ramped up investments in its Just Eat business significantly in the second half of the year.
Jitse Groen, chief executive at Just Eat, commented on the results and the company’s outlook for 2021:
“2020 was an exceptional year for Just Eat Takeaway.com. Right before the completion of the merger between Just Eat and Takeaway.com, the world was hit by Covid-19. This brought unprecedented challenges to our restaurants, consumers as well as to our organisation and staff, but it also created tailwinds for our business.”
“In the second half of the year, we increased our investments into the legacy Just Eat business significantly, building on our position as one of the largest food delivery companies in the world. Our revenue2 grew 54% in 2020, and we expect a further acceleration of our order growth in 2021 compared with last year.”