JUST Eat is gobbling up market share, with profits soaring by almost two thirds in the first half as more hungry customers flocked to its website.
The online takeaway giant has been taking the UK and other countries by storm since it was founded 14 years ago, taking advantage of a market that was slow to move online.
Its share price has rallied by 64 per cent since its UK flotation last year, with Just Eat now worth almost £3bn.
Chief executive David Buttress said it has made “a very strong start” to the year, with underlying earnings increasing by 62 per cent to £25.8m in the six months to 30 June on revenues up 54 per cent to £107.8m.
It now has more than 11m active users, with the number of orders up by 52 per cent to 41.9m in the first half.
In the UK, which is by far Just Eat’s biggest market, revenues rose 48 per cent to £76.9m. Yet analysts warned its dominant position could come under threat from rivals, including Hungry House, Deliveroo and even Burger King, which has started delivering .
“There are some big players moving into the takeaway delivery market and the risk is that longer-term margins might not be as robust as they appear now,” Peel Hunt’s Nick Batram said.
The majority of restaurants on Just Eat deliver orders themselves. However, new entrants are stepping in to provide logistics to chains, including Wagamama and Nando’s, that did not traditionally deliver.
Morgan Stanley analyst Andrea Ferraz said so-called own delivery could be to takeaway what Uber has been to taxi: “Initially, we think own delivery can grow side by side with Just Eat’s pure marketplace model, but long term, we see risks of cannibalisation.”
Just Eat’s chief financial officer Michael Wroe brushed off competition fears and said it did not have plans to move into the delivery business.
“Competition is not new. Our scale and experience in the sector means we are confident of our position going forward,” he told City A.M..