Just Eat chief to leave after surge in competition
Shares in company fell as much as 5.8% in early trading Monday before turning positive
Just Eat posted a positive trading update Monday, with full-year 2018 orders of 221 million and revenue of £780 million.
Just Eat’s chief executive is leaving after a surge in competition from rival apps and pressure from an activist shareholder to speed up decision-making and consider the sale of assets.
Peter Plumb is stepping down with immediate effect, with Peter Duffy, chief customer officer, appointed as interim CEO.
In December, shareholder Cat Rock Capital Management LP recommended Just Eat’s board consider selling its minority stake in Brazilian startup iFood, arguing it could generate up to £650 million ($837 million) that could potentially return to investors.
Shares in Just Eat fell as much as 5.8 per cent in early trading Monday before turning positive, up 0.8 per cent as of 9:06am in London.
Plumb was appointed to the top role in mid-2017 with a target of getting the company in the FTSE 100, achieved in December that year.
However over 2018 the shares fell 26.2 per cent, after facing increasing competition from new rivals including Deliveroo and Uber Eats, causing the company to fall out of the FTSE 100 last month.
The food delivery operation of Uber Technologies is looking to expand how users can pay for meals and generate more business via its website rather than its app – a key part of Just Eat’s business.
“The business is in good health,” said Plumb, “Now is the right time for me to step aside and make way for a new leader.”
Just Eat also posted a positive trading update Monday, with full-year 2018 orders of 221 million and revenue of £780 million. The company previously saw revenue between £740 million and £770 million.
Guidance for 2019 is revenue of £1 billion to £1.1 billion, and underlying earnings before tax in the range of £185 million to £205 million.
“The departure will raise questions about why it has taken place,” said Ian Whittaker, analyst at Liberum, in a research note. “One possible explanation is that there may have been a dispute over the direction of the Latin American strategy.”
Just Eat said that it expects its Latin American operations, dominated by its stake in iFood, to report an EBITDA loss in the range of £80 million to £100 million.
Just Eat added that it expects to grow marketplace EBITDA margins year on year and for its Canadian business, SkipTheDishes, to report its first full year profit in 2019.
Cat Rock, a small hedge fund with about $850 million under management, has a stake of about $50 million, according to data compiled by Bloomberg.
Just Eat will provide further detail on its plans at its full-year 2018 results on March 6th. – Bloomberg