LONDON (Reuters) – British online takeaway service Just Eat said on Friday that the pace of order growth in its home market slowed in the first three months of the year, prompting activist shareholder Cat Rock to step up its campaign for changes at the company.
The firm said UK orders increased 7.4 percent to 31.9 million over the three months to March 31 – a slowdown from growth of 13 percent in the fourth quarter of 2018. Analysts had expected 9.6 percent.
Just Eat said UK growth was impacted by a strong comparative number, unseasonably warm weather in February, and the Easter holiday falling in the second quarter this year.
“We would expect an improvement in UK order growth during the remainder of the year,” it said.
Just Eat is searching for a permanent replacement for Peter Plumb, the chief executive who left this year after his strategy was criticised by Cat Rock.
Cat Rock’s managing partner and chief investment officer Alex Captain said the slowdown in Just Eat’s order growth in the quarter underscored a need for urgent change.
“Just Eat needs a world-class CEO with online food delivery experience, and the board should be actively evaluating a merger with one of the many potential strategic partners available to the company,” he said.
Cat Rock also has a stake in Dutch-listed Takeaway.com.
Shares in Just Eat, up 28 percent so far this year, were trading down 5.7 percent at 1400 GMT on Friday.
“One quarter doesn’t make a whole, but Just Eat’s softer Q1 doesn’t bode well, despite guide reiterated for the full year,” analysts at Peel Hunt said.
AJ Bell investment director Russ Mould, said Just Eat’s excuses left out some important details.
“What is doesn’t mention is the increasingly competitive landscape for online takeaways with Deliveroo and Uber Eats making plays for market share,” he said.
Outside the UK, Just Eat said orders grew 40 percent to 29.5 million, fuelled by demand in Canada, Italy, Switzerland and Ireland.
Revenue rose 28 percent to £227.9 million and the group maintained its guidance of full year 2019 revenue in the range of £1.0 billion to £1.1 billion and core earnings in the range of £185 million to £205 million, excluding Brazil and Mexico.
(Reporting by James Davey; Editing by Paul Sandle/Keith Weir)