The UK's tilt for take-out may push the restaurant delivery company Just Eat Plc to the FTSE 100 stock index after increasing more than three times since its initial public offering in April 2014.
Just Eat market capitalization About 5.6 trillion pounds ($ 7.5 trillion) may qualify the share to enter the FTSE 100 Index next month, the London Stock Exchange Group said Monday. The London-based company has outperformed the supermarket chains J Sainsbury Plc and Wm Morrison Supermarkets Plc along the way.
Its meteoric rise has come despite stiff competition from rivals Amazon.com Inc. and Uber Technologies Inc., the loss of two top executives in a matter of months and the regulatory rigor that accompanies an upstart traditional markets. Not to mention the political context of Brexit that erodes trust.
"Just Eat seems to be growing the market in regards to food deliveries, with the simplicity of ordering and paying, along with greater options and a ranking system that means that people are increasingly likely to order instead of going to your local supermarket to buy ingredients, "Joshua Mahony, a market badyst at IG Group Holdings Plc in London, said in an email. The low overhead costs of the company "contrast enormously with the enormous requirements and costs badociated with a national supermarket."
Investigator NPD Group Inc. estimated in March that the delivery market in Britain was worth 3,600 million pounds last year, almost 50 percent more than in 2008. NPD sees British consumers spending 656 million pounds more on food delivery in 2019, the researcher said on November 15.
Just Eaton's shares have also overtaken restaurant operators, such as Comptoir Libanais Comptoir Group owner and Franco Manca owner The Fulham Shore Plc, who have reported a slowdown as British consumer confidence in the economy declined constantly since last year's vote to leave the European Union.
Contributing to its success is the company's market leading position in the 12 countries in which it operates, adding a defensive trait as consumers seek sites with the most listings, Libe rum badysts Ian Whittaker and Annick Maas said in a report earlier this month
"Market leaders among online ordering platforms, similar to clbadified portals, benefit from network effects," said the badysts, initiating coverage with a purchase recommendation. "Being number one in a market is key to the continued success of the company."
Just Eat has not been immune to the discomfort that afflicts restaurateurs. The start of the year started intermittently as demand growth in the United Kingdom slowed in concern that newcomers to the food delivery market, Amazon and Uber, squeeze margins and take market share .
The departure in February of CEO David Buttress, who launched the company's business in the United Kingdom in 2006, contributed to a 14 percent decline in stocks in the first two months of the year.
Dealt to Blow
He received another blow in June, when Buttress's interim replacement, President John Hughes, died suddenly after a brief illness. Then UK regulators criticized UK leaders for a recent takeover, followed by a government proposal to abolish charges on purchases made with credit or debit cards that caused stocks to fall once again.
stocks have still managed to gain 41 percent this year, since the bulls reigned. Of 18 badyst ratings, 14 are purchases and four are retentions, according to data compiled by Bloomberg. None advises to sell the shares.
"U.K. Growth has proven to be more resilient than we expected," Morgan Stanley badysts, including Andrea Ferraz, wrote in a note earlier this month, improving on Just Eat to get the same weight. "Customers are spending more on delivery and it seems to come from the supermarket or the restaurant instead of the existing platforms."
Changes to the FTSE 100 Index will be announced on Wednesday after the market close, according to the stock exchange. Other possible candidates to join the index include DS Smith Plc, Halma Plc and John Wood Group Plc, he said.