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Just Eat Takeaway.com shares rise, but it remains loss-making

Despite a climb in revenue year-on-year, Just Eat Takeaway.com (JET) is still making a loss. The company was part of a group of ‘last mile’ delivery businesses that found increased opportunities during lockdown.

(Video Transcript)

Just Eat Takeaway.com - the numbers

Just Eat Takeaway.com NV, Europe's largest meal delivery company, reported a smaller core loss than expected for the first half (H1) of 2022 and revenue just below analyst forecasts.

Lets take a look at the numbers as the company reported first half orders of 509.4 million meals. Estimates had been for 546 million so that was shy of what was expected. Revenue came in, as you can see, just a touch less than the €2.8 billion that analysts had been looking for. This compares to revenue of €2.6 billion in the same period last year so that was up over the year-to-year comparison. Adjusted pre-tax was for a loss of €134 million, improving from a loss of €189 million in the same period last year.

But, when you're looking at €2.6 billion of revenue and you're getting a loss of €34 million for the same period, you do have to start asking questions. And these are questions I've been asking for a while now about these 'last mile' companies as to just how it is they are going to turn a profit and this remains the problem.

Just Eat Takeaway.com share price chart

If you look at the share price chart, I think this is really what's been bugging the investors in this business and traders see the potential value on the downside because when we saw this record high in the stock all way up at €100.50, that was going back to October 2020, and of course that was right at the height of the lockdowns globally. This company was really benefiting from this with people ordering meals and obviously wanting to stay at home, having to stay at home, but wanting to have the benefits of eating someone else's prepared food. So they go to restaurants, use Just Eat Takeaway.

But since then it's become more and more obvious that it is difficult to turn a profit. Now we've seen almost 90% lost in the highs that we saw back in October 2020 all the way down to the recent lows - this candle down here at €11.17.

Since then we have seen a 46% uplift in stock and in fact the stock is up 1.8% so far today after two hours worth of the session, so there is an appreciation that perhaps we have already seen the lows, but the same questions remain: how does this company make a profit? Only when we look out to future numbers we're really going to find that out.

One other thing that was a little bit of pressure building in the numbers recently and that is what the company is going to do with the GrubHub Inc acquisition we saw back in 2021. Today it's reported an impairment of €3 billion for that acquisition. So it's already beginning to write that off.

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