Just Eat boosts investor confidence with new share buyback programme

Just Eat Takeaway.com NV, the Netherlands-based online food delivery giant, has unveiled a robust strategy to reassure investors as it launched a €150 million share buyback program on Wednesday. The move follows an optimistic upgrade to its earnings outlook for 2023, albeit with slightly reduced top-line expectations.

In early trading, Just Eat Takeaway.com NV experienced a surge of 6.7%, propelling its shares to 1,103.00 pence. This surge came in response to the company’s announcement of an improved profit forecast, raising its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance to €310 million for the full year, up from the previous estimate of €275 million.

Despite facing a challenging year, marked by a 16% decline in stock value over the past 12 months, the company remains optimistic. Just Eat Takeaway.com NV reported a positive adjusted EBITDA of €143 million in the first half of 2023, compared to a €350 million loss in 2021, reflecting a significant turnaround.

The company’s fiscal performance in 2022 was marred by a pre-tax loss of €5.67 billion, which widened from €1.04 billion in 2021 due to impairment losses of €4.6 billion related to its US operation, Grubhub.

Just Eat Takeaway.com NV also revealed plans to explore the partial or full sale of Grubhub. CEO Jitse Groen stated, “There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be,” reiterating the cautious approach outlined in the company’s half-year results statement from July.

Additionally, the company announced a new share buyback initiative worth €150 million. These repurchased shares will either be allocated for share-based compensation or cancelled to reduce capital, further strengthening the company’s financial position. The buyback, set to conclude by September 30 next year, is expected to remove 5.7% of shares from circulation, aligning with the company’s authorised limit of 10%.