Just Eat shares surge on potential growth abroad

Just Eat shares jumped after a raft of international acquisitions underlined the ambitions ofthe online takeaway marketplace to expand beyond a crowded domestic market.

The £94.7m (€124m) purchase from Rocket Internet of online food distributors in Spain, Italy, Brazil, and Mexico adds to Just Eat’s existing operations in those countries.

The company entered Mexico last year as it seeks to broaden its presence. The shares rose as much as 11%.

Since starting in Denmark in 2001, Just Eat has expanded to 15 international markets, with Spain and Italy among the fastest growing.

Competition in the UK is heating up, prompting some to downgrade Just Eat. Rocket Internet partly owns rival company Delivery Hero, which it plans to list on the stock exchange this year.

Just Eat has average organic sales growth of 46% across the countries it operates in, sending the company’s valuation soaring to 41 times estimated earnings over the next 12 months.

GrubHub, a US rival, trades on 29 times estimated earnings. The stock has fallen 22% in the early part of 2016 amid concern over its rapid growth at home.

Companies such as Deliveroo, which deliver food from restaurants to a customer’s front door, are becoming an increasingly popular alternative to Just Eat’s online-only portal.

Bloomberg