Just Eat pares loss and sees spending on Katy Perry ads at peak      

Just Eat maintained growth and margin forecasts for the full year. Picture: Gareth Fuller/PA Wire

Just Eat, Europe's largest meal delivery company, reported a smaller loss for the first half of 2022 and maintained growth and margin forecasts for the full year, promising lower spending on costs such as a recent commercial featuring pop icon Katy Perry.

Investors lauded the company's focus on profitability, which includes recent moves to raise restaurant commissions and retrench in markets including the US and France, sending shares which trade in  Amsterdam up 5% to almost €20 at one stage. However, the shares are down 60% in the year to date.

Marketing expenditure increased by 40% to €414m in the first half from a year earlier, which the company attributed to spending on US arm Grubhub, which last month struck a deal to give Amazon prime users free delivery. Just Eat also spent on football sponsorships and the Katy Perry ad. 

"I can assure you Katy was not responsible for the marketing costs," CEO Jitse Groen joked on a call with reporters.

He said the company would be decreasing marketing spending slightly in the second half, but cautioned it would remain high given the company's overall growth. 

The company reported an adjusted loss €134m for the first half, compared with a loss of €189m a year earlier. Revenues rose to almost €2.8bn from €2.6bn. 

Mr Groen said the company's earnings would improve in the second half of 2022 and turn positive in 2023. 

Analyst Giles Thorne of Jefferies said the first half numbers were worse than expected, but investors would be reassured by the company's statement that it still expects total order value to grow.

"There are reasons to believe the full year guidance is pretty robust," Mr Thorne said, noting that a post-Covid-19 lull is fading and many consumers who began ordering food online during the pandemic will continue due to the convenience. 

The company reiterated that it is exploring the "full or partial" sale of Grubhub, the US company it bought in 2021 for $7.3bn (€7.2bn). Just Eat took a €3.5bn impairment charge on Grubhub on Wednesday. 

- Reuters