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Business shares dip as US growth stalls; CEO sees better Q4 shares dip as US growth stalls; CEO sees better Q4

FILE PHOTO: The app for Just Eat is displayed on a smartphone in this posed picture in London, Britain, August 5, 2019. REUTERS/Toby Melville/File Photo

AMSTERDAM : Weaker than expected third-quarter orders at Just Eat knocked shares in the online food delivery company on Wednesday, with orders in the United States growing just 3per cent.

Shares in the company, which completed its US$7.3 billion purchase of U.S. peer GrubHub in June, were down 4.4per cent to 62.11 euros at 0755 GMT, taking losses this year to more than 30per cent.

Total orders in the quarter rose 25per cent to 266 million, below the 35per cent increase expected by analysts at ING bank.

Growth in Britain, the company's largest market, was 51per cent, but weakest in the United States, now its second-biggest market.

GrubHub Chief Executive Matt Maloney said last week he intended to leave in December, and Just Eat Takeaway said on Wednesday it had started "an improvement programme re-focusing the company on GrubHub's strongholds".

Group CEO Jitse Groen said he would address the U.S. situation more fully at a capital markets day Oct. 21. But he said that the company is currently seeing a return to pre-pandemic behaviour in its biggest markets, citing traffic data and workers returning to offices.

He said that, in combination with darker days and worse weather, should lead to a stronger fourth quarter.

"We presume there are not going to be more lockdowns, in which case of course we would grow faster than what we currently have in our budget" expectations, he told analysts on a call.

In August, GrubHub suffered a setback when New York City, its largest U.S. market, capped the commissions it and rivals can charge restaurants to use their platforms at 15per cent of food orders for delivery.

Takeaway competes with Uber Eats, and Door Dash, in the United States, and Deliveroo and Delivery Hero in Europe, among others.

The company on Wednesday repeated its full-year forecast for a loss before interest, tax, depreciation and amortisation of 1per cent-1.5per cent on a gross transaction value of 28-30 billion euros (US$32-US$35 billion) for 2021, or a loss of 280-380 million euros.

In August, Takeaway reported an EBITDA loss of 190 million euros for the first half, but said it expected that number to improve in the second half.

Third-quarter gross transaction value, a common measure for e-commerce companies, increased by 6.8 billion euros, or 21per cent, bringing the nine-month total to 20.9 billion euros.

(US$1 = 0.8657 euros)

(Reporting by Toby Sterling; editing by Kim Coghill and Mark Potter)

Source: Reuters


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