Just Eat suffers €3bn hit on Grubhub (2024)

Just Eat Takeaway.com has taken a €3 billion hit against the value of its US business as it reported a 7 per cent fall in first-half orders.

The impairment of Grubhub, which pushed the Dutch food delivery group to a €3.5 billion loss, was attributed to the fall in valuations in the sector, rising interest rates and “equity volatility on technical valuation metrics”.

Excluding the US write-down, Just Eat Takeaway’s half-year losses widened from €486 million to €500 million. On an underlying basis, adjusted losses narrowed from €189 million to €134 million, and Jitse Groen, the chief executive, predicted the group would move into profit next year.

The fall in orders in the first half was due to the lifting of Covid-related lockdowns, although Groen, 44, said the decline had been offset by a higher average order value and currency movements. As a result, its gross transaction value (GTV) — a key industry metric — was stable at €14.2 billion, with revenue up 7 per cent at €2.8 billion.

Separately, the group said that an inquiry into the personal conduct of Jörg Gerbig, 41, the company’s chief operating officer, had been concluded and his suspension lifted. The external inquiry, launched in May after a complaint, was confidential and no details of the allegations have been revealed, although at the time there were suggestions they could have been linked to a company skiing trip to Switzerland, which hosted 5,400 members of staff.

The allegations over Gerbig’s conduct emerged at the annual meeting in May where shareholders expressed their concerns over the way the company had been run. Adriaan Nühn, the chairman, left ahead of the annual meeting after acknowledging shareholders’ concerns.

Although the company successfully expanded through a series of acquisitions, including London-listed Just Eat, its $7.3 billion takeover of the US group Grubhub last year was seen as a deal too far. Investors including Cat Rock Capital, which has a stake of almost 6 per cent, said it had overpaid for a poor business and called for the company to exit from Grubhub by selling it on. After initially rejecting the idea, Groen did an abrupt U-turn in April and said he would now consider selling.

Last month Just Eat Takeaway’s poor run of fortunes took a turn for the better when Amazon signed a deal to take a stake of up to 15 per cent in the food delivery group’s US business. Investors suggested that the presence of the online retail behemoth on the Grubhub share register would make it more attractive to suitors. Groen has been criticised for burning through cash to buy rivals then investing significant sums in expanding those businesses. The Dutchman admitted that “a lot of things were not successful” but said that Just Eat Takeaway was now “two times larger than it was pre-pandemic”.

Asked to justify the impairment of Grubhub, he said: “A lot of businesses in our sector have lost 60 per cent to 80 per cent of their market value.”

Its US business suffered a fall in orders of 10 per cent in the first half, with a flat GTV, while the UK and Ireland division was down 7 per cent on orders but up 1 per cent on GTV. The total number of orders for the group fell to 509.4 million. Its shares rose by 104½p, or 6.7 per cent, to £16.62p.

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