TIDMJE.
RNS Number : 5981H
JUST EAT plc
17 March 2015
JUST EAT plc
("JUST EAT", the "Company" or the "Group")
Full Year Results
Excellent growth, momentum continues into 2015
JUST EAT plc (LSE: JE.) the world's leading online market place
for restaurant delivery, connecting 8.1 million Active Users to
over 45,700 takeaway restaurants, today reports another year of
excellent growth with revenues for the year ended 31 December 2014
up 62% to GBP157.0 million and Underlying EBITDA up 131% to GBP32.6
million.
Financial Highlights
-- Revenues up 62% to GBP157.0 million (2013: GBP96.8 million)
-- Orders up 52% to 61.2 million (2013: 40.2 million)
-- Underlying EBITDA(1) up 131% to GBP32.6 million (2013: GBP14.1 million)
-- Basic earnings per share up 553% to 9.8p (2013: 1.5p)
-- Adjusted basic earnings per share(2) up 200% to 4.2p (2013: 1.4p)
-- Operating cash flow up 98% to GBP38.1 million (2013: GBP19.2
million), representing 117% of Underlying EBITDA
-- Continued investment for long-term growth
Operational and Strategic Highlights
-- Active Users(3) up 37% to 8.1 million (2013: 5.9 million)
-- The Group processed orders worth over GBP1 billion for our takeaway restaurants
-- Continued progress on our three strategic initiatives of
improving consumer experience, bringing greater choice and driving
channel shift
-- Mobile strategy success as UK orders placed via mobile
devices now 61% of orders (2013: 43%)(4)
-- Seven strategic acquisitions completed in 2014; a further three completed post year-end
David Buttress, Chief Executive Officer, commented
"It's been another excellent year for JUST EAT. Our results
demonstrate how we are successfully building market-leading
positions as more consumers discover the ease of use and wide
choice of cuisines that our marketplaces for takeaway food offer.
This would not have been possible without the commitment and
passion of all of our teams and I would like to thank them for
their hard work and dedication.
I am delighted with the progress we have made both financially
and operationally. I remain confident for the year ahead as we
focus on our strategic objectives, investing to deliver long-term,
sustainable returns for our shareholders."
Current Trading and Outlook
Strong trading momentum has continued into 2015. Investment for
growth in areas such as technology, marketing and people will
continue, and as a result, the Board expects 2015 revenues to
marginally exceed GBP200 million, at current exchange rates.
- Ends -
1. Underlying EBITDA is the main measure of profit used by
management to assess the performance of the Group's businesses. It
is based on EBITDA (defined as earnings before finance income and
costs, taxation, depreciation and amortisation) but excludes the
Group's share of depreciation and amortisation of joint ventures
and associates, long term employee incentive costs, exceptional
items, foreign currency gains and losses and 'other gains and
losses' (being profits or losses arising on the disposal and deemed
disposal of operations, and fair value gains and losses on
financial assets classified as fair value through profit or loss).
At a segmental level, Underlying EBITDA also excludes intra-group
franchise fee arrangements and incorporates an allocation of Group
technology and central costs (all of which net out on a
consolidated level). A reconciliation between operating profit and
Underlying EBITDA is shown below.
2. Adjusted Basic Earnings per Share is the main measure of
earnings per share used by the Group and is calculated using profit
attributable to the holders of Ordinary shares in the parent before
long term employee incentive costs, acquired intangible asset
amortisation, exceptional items, 'other gains and losses', foreign
currency gains and losses and the tax impact of these adjusting
items.
3. An Active User represents an account that has placed at least
one order within the last 12 months.
4. Includes those orders placed using tablet devices.
The Company will hold a presentation for analysts today at 9.30
am at the Lincoln Centre, 18 Lincoln's Inn Fields, London, WC2A
3ED.
The presentation will be webcast live and will be accessible via
the JUST EAT website at www.just-eat.com.
An on-demand replay will also be available on the JUST EAT
website following the presentation.
Enquiries:
+44 (0) 20 3667
JUST EAT 6900
David Buttress, Group Chief Executive
Officer
Michael Wroe, Group Chief Financial
Officer
Adam Kay, Head of Investor Relations
+44 (0) 20 7404
Brunswick Group LLP 5959
Sarah West, Natalia Dyett
Forward looking statements
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". By their nature,
forward-looking statements involve risk and uncertainty since they
relate to future events and circumstances. Actual results may, and
often do, differ materially from any forward-looking statements.
Any forward-looking statements in this announcement reflect
management's view with respect to future events as at the date of
this announcement. Save as required by law or by the Listing Rules
of the UK Listing Authority, the Company undertakes no obligation
to publicly revise any forward-looking statements in this
announcement following any change in its expectations or to reflect
events or circumstances after the date of this announcement.
About the JUST EAT Group
JUST EAT plc operates the world's leading online market place
for restaurant delivery. Headquartered in London, there are
currently over 45,700 takeaway restaurants within the international
JUST EAT network, which uses proprietary technology to offer a
quick and efficient online ordering service for consumers and
restaurant partners alike. JUST EAT is a member of the FTSE 250
Index. www.just-eat.com/investors(5)
Chairman's Statement
This has been another excellent year for JUST EAT, with revenues
up 62% to GBP157.0 million and Underlying EBITDA up 131% to GBP32.6
million, demonstrating the scale of the market opportunity and our
ability to drive top and bottom line growth by meeting the needs of
consumers and restaurants.
We aim to deliver predictable and transparent financial
performance. JUST EAT's significant operational leverage saw
margins expand as revenues grew, more than offsetting our
substantial ongoing investments in group infrastructure, technology
and markets. Furthermore, the business has an attractive cash
profile, with a very favourable working capital cycle.
As well as sharply higher order volumes in 2014, which increased
52% year-on-year, we have seen a continuing shift to mobile.
Through our mobile-led strategy this channel now provides over 60%
of orders for the UK. We also enhanced our relationship with our
restaurant partners, who are embracing the improved tools we offer
them.
2014 was a landmark year, with our IPO in April being an
important milestone and we were delighted to attract such a
high-quality shareholder base. We believe that the investment
community is increasingly recognising the value of JUST EAT, as we
continue to deliver on our commitments. Our business model delivers
value to consumers and restaurants, which in turn creates value for
shareholders.
The IPO has given us the financial strength to develop through
acquisition, if opportunities to buy leading positions in markets
of scale present themselves. In the short term, our strategy is to
continue to build our business by extending our leadership in
existing markets and to focus on technology and innovation.
John Hughes, CBE
Chairman
17 March 2015
CEO's Statement
Excellent growth
Order growth is a key measure of JUST EAT's success. It
illustrates how well we have executed on our strategy and
reinforces the attractiveness of our market for the long term. In
2014, orders grew by 52% to 61.2 million, worth over GBP1 billion
to our restaurant partners.
Revenues grew 62% to GBP157.0 million. Underlying EBITDA
increased to GBP32.6 million from GBP14.1 million, which is an
excellent result in a period where we made significant investment
in our future growth.
Continued strategic progress
We are committed to leading the industry and improving our
consumers' experience. During 2014, we continued our mobile-led
product evolution, with our web refresh meaning users see the same
product flow, whatever device they are using. We expanded our pilot
in real-time order tracking with trials now in 11 restaurants. In
the long term, we believe our ability to innovate at scale will
profoundly change the consumer experience and reinforce the
benefits of building the leading market place for the fragmented
takeaway industry.
Our technology gives us a real competitive advantage in bringing
greater choice. JUST EAT has more than a decade of experience in
building, operating and enhancing a complex real-time eCommerce
platform. At peak, we now process 1,100 orders per minute through
our contracted network, demonstrating our ability to reliably
deliver scalable solutions to our 45,700 restaurant partners. We
have recently worked on expanding into the collection market and
have now signed over 1,000 collection-only restaurants in the UK;
initial results from this market are positive.
Consumers trust strong brands. We believe that television
remains the best way to reach a mass-market audience, to help
create and strengthen our brand and accelerate channel shift from
telephone to online. We remain strongly committed to building our
brand in all of our markets, and we are now a TV brand in the
majority of them. This investment increases loyalty and consumer
allegiance to JUST EAT, ensuring we remain the clear choice for
hungry consumers. In the UK, top-of-mind awareness(6) increased
from 39% in December 2013 to 44% in December 2014.
In our business, being market leader is critical for many
reasons, crucially to ensure the consumer has a strong single
source of information and choice in a highly fragmented sector. We
continue to build clear leadership positions wherever we operate.
In Brazil, we merged our business with iFood to give us a 25% share
of the undisputed market leader, increasing our stake to 30% after
year-end. In France we increased our share in market leading
alloresto.fr from 50% to 80%. These deals have strengthened our
position in two of our key international markets. We also cemented
our leadership position in Ireland with the purchase of Eatcity.ie
in November 2014.
Clear priorities
We have a clear focus on delivering on our three strategic
initiatives, including completing appropriate M&A and
developing our people for the long term.
We are continuing to increase our investment in engineering and
product into 2015, to accelerate the introduction of new features
on our platforms. We are driving channel shift through initiatives
such as mobile and brand refresh; improving the consumer experience
through innovation and improved information whilst expanding choice
through restaurant signings.
We completed seven M&A transactions during the year and
three post year end. These delivered on our stated aims of
acquiring leaders in markets of scale, making in-market
acquisitions and advancing our technology base.
People are integral to what we do and we have an outstanding
team of more than 1,500 passionate and dedicated JUST EATers. We
are committed to enhancing our team by selective recruitment and
developing our existing team through our in-house talent management
programmes. We have opened a new office in Bristol with support
from Invest Bristol & Bath and are building a relationship with
the University of Bristol to attract the best technical engineering
graduates in the West Country and Wales; an area with a history of
success within the technology sector.
Outlook
Looking forward, we must capitalise on our clear leadership
positions both in established markets such as the UK and in large,
developing markets such as France, Brazil and Spain, markets of
significant scale but in which online ordering is still at an early
stage. Building leadership positions in those markets will create
great long-term value for shareholders.
Going into 2015, JUST EAT is in a very strong position. We are
on track to deliver on our growth targets, and in 2015 we currently
expect revenues marginally in excess of GBP200 million, at current
exchange rates.
We will continue to drive channel shift and further strengthen
our brand. We will also continue to innovate and then scale that
innovation, to ensure that new products and features are available
to the vast majority of our 8.1 million Active Users, truly
empowering them to love their takeaway experience.
David Buttress
CEO
17 March 2015
CFO Update and Financial Review
The results of the Group for the year ended 31 December 2014
(the "Year" or the "Period") demonstrate the on-going strength of
the JUST EAT business model with revenue growth of 62% (65% on a
forex neutral basis) and continued margin expansion.
This significant increase in revenues and the operational
leverage achieved resulted in the Group Underlying EBITDA margin
growing to 21% from 15%. This is pleasing in a year in which we
delivered a successful IPO, completed seven M&A transactions
and continued to drive long-term growth through further investment
in staff, marketing, technology and product.
Summary and Outlook
The Group delivered excellent revenue growth of 62% in 2014,
with all segments trading ahead of expectations. These results are
a tangible demonstration of the continued hard work and commitment
from all the teams across the JUST EAT business.
Year ended Year ended 2014 growth 2013 growth
31 December 31 December % %
2014 2013
GBPm GBPm
Revenue 157.0 96.8 62% 62%
Underlying EBITDA 32.6 14.1 131% 513%
Operating profit 19.0 6.8 179% n/a
Operating cash
flow 38.1 19.2 98% 90%
Adjusted basic
EPS 4.2 1.4 200% n/a
The growth in 2014 was delivered alongside an increase in
Underlying EBITDA in the UK and Denmark and, as planned, our Other
segment losses were in line with 2013 but generated 83% more
revenue. The returns generated in the UK and Denmark more than
offset the ongoing investment in Other and Head Office resulting in
the Underlying EBITDA for the Group increasing by 131% to GBP32.6
million.
Underlying EBITDA converts strongly to operating cash flow due
to the beneficial working capital cycle inherent in the business
model. In 2014, operating cash flow represented 117% of Underlying
EBITDA (2013: 136%).
The investment seen during 2014 is expected to continue in 2015
as we strengthen our team, expand our marketing activities and
develop existing and new products. This investment is expected to
deliver long-term growth and for 2015, the Board currently expects
revenues to marginally exceed GBP200 million (at current exchange
rates).
Group Result
The Group's Income Statement is shown below. All key metrics on
the Income Statement, including revenue, operating profit, profit
before tax, basic and adjusted EPS have improved year-on-year.
Year ended Year ended
31 December 31 December
2014 2013
Summary Income Statement GBPm GBPm
Continuing operations
Revenue 157.0 96.8
Cost of sales (16.1) (10.0)
Gross profit 140.9 86.8
Long term employee incentive
costs (4.9) (1.7)
Exceptional items (2.7) (1.0)
Other administrative expenses (113.5) (77.3)
Total administrative expenses (121.1) (80.0)
Share of results of joint venture
and associate (0.8) -
Operating profit 19.0 6.8
Other gains 38.2 3.4
Finance income 0.4 0.2
Finance costs (0.2) (0.2)
Profit before tax 57.4 10.2
Taxation (5.6) (3.4)
Profit for the year 51.8 6.8
The Income Statement includes some significant fluctuations that
are not considered part of normal business operations. These
include the 'other gains', long term employee incentive costs,
exceptional items (such as the IPO costs and acquisition costs) and
foreign exchange. These are removed from the measure of profit
before tax, along with interest, depreciation and amortisation to
arrive at Underlying EBITDA. This is the measure we use to assess
our operational and segmental performance. We believe this
Underlying EBITDA measure more accurately reflects the key drivers
of long term profitability for the Group and removes those items
(both positive and negative), which are mainly non-cash and do not
impact underlying trading performance.
A reconciliation between Operating Profit and Underlying EBITDA
is shown below.
Year ended Year ended
31 December 31 December
2014 2013
GBPm GBPm
Operating profit 19.0 6.8
Depreciation - Subsidiaries 3.3 2.7
Depreciation and amortisation -
JV and associate 0.2 0.4
Amortisation - Acquired intangible
assets 2.1 0.8
Amortisation - Other assets 0.6 0.1
Long term employee incentive costs 4.9 1.7
Exceptional items 2.7 1.0
Foreign currency gains and losses (0.2) 0.6
Underlying EBITDA 32.6 14.1
Segmental Review
The Group reports its results under three operating segments,
the UK, Denmark and Other. The UK and Danish operations are shown
separately as they are our most established markets in terms of
market penetration and maturity. The Other segment contains all
other controlled businesses, which are at various stages of growth
and development. Some are profitable whilst others are still at an
earlier stage requiring significant investment relative to their
size, particularly in sales and marketing. To ensure appropriate
measurement of success by segment, the results of each segment
include its fully allocated share of central technology, product
and head office costs, as explained below.
Technology and Product continue to be areas of significant
additional investment, with headcount in 2014 increasing to 206
from 126. It is predominantly run as a single integrated team to
improve efficiency and speed up internationalisation of products.
The individual trading segments are allocated the full cost of this
support and development (including all servers, maintenance,
innovation and engineering) on a per fixed order fee basis for
those nine countries on our "core" platform, representing 95% of
orders. During 2014, only a small proportion of specific project
costs were not allocated which were either included as part of Head
Office costs or capitalised. As we move to further develop the
innovative technology referred to in the CEO statement, we expect
some of the additional investment in technology development to be
capitalised in 2015 and beyond.
Head office costs include both the ongoing central costs of
operating the Group as a whole and those functions required for
efficiency of shared expertise, such as Search Engine Marketing
("SEM"), finance, legal and HR. Those head office costs that can be
reasonably attributed to individual segments are allocated on a
consistent basis and therefore, the reported Head Office costs are
the true central costs remaining after such allocations.
The results from Joint Ventures are equity accounted and
presented separately since the Group does not control these
operations.
Year ended 31
December Year ended 31
2014 December 2013
millions millions
Segment orders
United Kingdom 45.5 29.1
Denmark 4.5 4.2
Other 11.2 6.9
------------- --------------
61.2 40.2
============= ==============
Revenue (GBPm)
United Kingdom 114.1 68.8
Denmark 12.8 11.6
Other 29.8 16.3
------------- --------------
Total segment revenue 156.7 96.7
Head Office 0.3 0.1
------------- --------------
157.0 96.8
============= ==============
Underlying EBITDA and result
(GBPm)
United Kingdom 45.9 25.5
Denmark 5.1 4.6
Other (11.8) (11.7)
------------- --------------
Total segment Underlying EBITDA 39.2 18.4
Head Office (6.0) (4.7)
Share of equity accounted joint
venture and associates(7) (0.6) 0.4
------------- --------------
32.6 14.1
============= ==============
United Kingdom
The UK business had another excellent year and continues to be
the main driver of revenue growth in the Group. The order-driven
revenues (predominately commission) continued to grow, both in
absolute terms and as a percentage of revenue. These represented
92% of total UK revenue (2013: 88%).
The key drivers of UK order growth (up 56% to 45.5 million)
include:
-- expansion of the restaurant partner network where we added
over 4,500 new takeaway restaurants to the platform during the year
(2013: 4,700). Included within this number for the first time are
over 1,000 new restaurants signed as part of our trial to expand
our offering to include collection-only restaurants (i.e. those who
do not offer delivery services). Expansion of this trial will
continue in 2015 and our focus will be on driving consumer
adoption;
-- an overall increase in Active Users in the UK to 5.5 million
at 31 December 2014 from 3.9 million at 31 December 2013;
-- continuous improvement of our mobile offering, including the
launch of iPad and Android tablet apps. During the year total
mobile orders (including tablets) in the UK accounted for almost
61% of total orders (2013: 43%) and orders via our apps now account
for 55% of these mobile orders (up from 43%);
-- investment in marketing, which continued to grow with an
increase in total spend of 42%, all of which was expensed to the
income statement. 2014 saw a number of new initiatives, namely the
refresh of our brand and launch of our #minifistpump campaign,
along with sponsoring ITV's Take Me Out and becoming the main shirt
sponsor for Derby County Football Club. These complemented our
ongoing activities in digital, trade and brand marketing. Despite
the size of the increase in marketing, investment spend as a
percentage of revenue reduced to 18% from 21% last year; and
-- year-on-year order growth comparatives can be impacted by
particularly hot or cold and wet weather. However, the very wet
spell in the UK at the end of 2013 and into early 2014 has had
little overall effect on the year-on-year growth rates as the
positive impact in January/February 2014 was offset by tougher
prior year comparatives for December 2014.
The UK continued to break daily order records through the year
and in November reached the milestone of processing its 100
millionth UK order since it started trading in March 2006.
On 1 January 2014 the commission rate charged to restaurants on
orders increased to 12% from 11%, the first increase in three
years. Only a handful of restaurants left the network following
this price change, which we feel supports the work we have done in
building relationships with our restaurant partners and in
demonstrating the value JUST EAT brings to their businesses. This
commission increase was the major driver in the 10% increase
year-on-year in UK Average Revenue per Order ("ARPO"). This is up
from the 2013 year-on-year ARPO growth of 2.4% that was driven just
by food/service price inflation.
Underlying EBITDA margin (the segment result) in the UK grew to
40% (2013: 37%). Our belief in the scale of the opportunity in the
UK means that we will continue to invest in UK sales, marketing,
technology and new products to drive long-term growth.
Denmark
The Danish business has continued to perform well in the
relatively mature Danish online takeaway market, a credit to the
team. Revenues, up 10% (2013: 16%) to GBP12.8 million (2013:
GBP11.6 million) was driven mainly by an increase in orders up 7%
to 4.5 million (2013: 4.2 million), and conversion of top-placement
advertising.
On a forex neutral basis, revenue growth in Denmark would have
been 16%.
The Underlying EBITDA margin in Denmark was maintained at 40%
(2013: 40%) generating GBP5.1 million of Underlying EBITDA (2013:
GBP4.6 million). As with revenue, the weakness of the Danish Kroner
reduced the reported 2014 EBITDA on conversion to Pound Sterling
compared with 2013. We continue to believe there remains steady
revenue growth prospects in the Danish market and as such we will
manage margins in Denmark to maximise such growth rather than
optimise for short term profitability.
Other
This segment consists of the trading entities we control outside
the core UK and Danish businesses, including our higher potential
growth opportunity countries of France, Canada and Spain. Our
French business became part of this segment in July 2014 when we
obtained control by increasing our shareholding from 50% to 80%.
Brazil ceased to be consolidated from November following that
businesses' merger with iFood when JUST EAT's stake reduced to 25%.
We increased this stake to 30% post year-end.
Progress in this segment remains good with total revenues up 83%
to GBP29.8 million in 2014, up 96% on a forex neutral basis. This
growth includes the impact of consolidating the French business
from July but having to exclude the Brazilian business from
November. Adjusting for these changes, the growth would have been
64% on a forex neutral basis. Additionally, the contraction of our
Dutch business has a notable detrimental impact on our reported
growth in this segment.
This segment represents a blend of growth rates across the nine
geographies. Spain and Italy are amongst the fastest growing
countries with slightly slower growth in our more mature markets
such as the now profitable Irish business. The only outlier is the
highly competitive Benelux region, which contracted slightly during
the year and where we remain the number two in the market.
Orders remain the key driver of growth in this segment, growing
by 62% year-on-year (2013: 60%). On a like for like basis
(adjusting for the changes in control), orders grew 51%. The Other
segment also benefitted from rising food prices and commission
rates being gradually increased in some territories, leading to an
ARPO increase of 8.7% (2013: 15.7%).
With continued investment in growth, full-year Underlying EBITDA
losses in the Other segment remain in line with 2013 at GBP11.8
million, although reducing significantly as a percentage of
revenue. Initiatives including the launch of television advertising
in Spain and the expansion of French sales activities outside
Paris, were planned and delivered with considerable success. The
additional revenues generated by these initiatives was reinvested
to build long-term growth potential. This, combined with the low
levels of online penetration for takeaway ordering in the majority
of these geographies, provides substantial runway for JUST EAT and
we will continue our investment to drive consumer channel shift and
secure market share.
Share of profits from the joint venture and associates
The Indian associate remained in this category all year and was
the main driver of the reported JV losses. It was classified as
Held for Sale in the balance sheet as it was sold after the
year-end.
The results of the French business moved from being classed as a
Joint Venture into being a subsidiary in the Other segment in July
2014.
The joint venture and associates continue to perform strongly.
We are delighted to have merged our business with iFood to create
the undisputed market leader in Brazil in which we owned 25% at the
year-end. Following the merger, this business has become one of the
fastest growing geographies in the Group and now has over 480,000
orders per month. Given the market potential in Brazil we expect to
continue to invest heavily in this associate.
Head Office Costs
Head Office costs, after recharges, have significantly increased
year-on-year due to the expenses of being a publicly listed company
and the impact of further investment in people, technology and
product. The vast majority of technology and product costs are
expensed as incurred. As described above, technology and certain
Head Office costs are allocated to the Group's operational
businesses such that segmental EBITDAs include all appropriate
costs.
The Group has opened a second UK technology site in Bristol in
order to attract talent from the West Country and Wales.
Items between Underlying EBITDA and Operating Profit
Depreciation
The depreciation charges mainly relate to the JCT terminals that
are in situ in the vast majority of the 45,700 restaurants on the
JUST EAT network. These are depreciated over three years.
Amortisation
The amortisation charge principally relates to the intangibles
acquired as a result of the many acquisitions completed by the
Group. The assets principally acquired are the restaurant
contracts, the brand of the acquired company and any intellectual
property, typically relating to the underlying technology platform.
The increase in the charge in 2014 compared to 2013 (up GBP1.8
million to GBP2.7 million excluding the joint venture and
associates) is principally a result of the intangible assets
recognised as part of the Meal2Go purchase in February 2014 and the
French step-up in July 2014. The full year impact of this
additional amortisation will be felt in 2015.
Long term employee incentive costs
Long term employee incentive costs of GBP4.9 million (2013:
GBP1.7 million) primarily relate to share awards granted to
employees, recognised over the vesting period of the awards. The
increased charge reflects the additional awards granted at or
around the time of the IPO, including the free share award granted
to all qualifying employees in April 2014. As a rapidly growing
technology business we expect equity participation to remain an
important element of attracting and motivating the right
people.
Exceptional items
Exceptional items of GBP2.7 million (2013: GBP1.0 million)
included GBP2.3 million of costs relating to the IPO and GBP0.4
million of acquisition costs.
Foreign currency translation
A foreign currency transaction gain of GBP0.2 million (2013:
loss of GBP0.6 million) arose due to retranslating monetary assets
and liabilities in foreign currencies.
Items below operating profit
Other gains
The business has recorded a significant non-cash gain on two
deemed disposals in relation to our French and Brazilian
operations.
The Group increased its stake in the French business from 50% to
80%. This resulted in a change in control and so the business was
no longer treated as a joint venture, but as a subsidiary. The
transaction resulted in a non-cash gain of GBP32.0 million, of
which GBP17.8 million was the gain on the deemed disposal of the
Joint Venture and GBP14.2 million resulted from the fair value
gains on the Group's option to acquire the remaining shares.
The control of the Brazilian business also changed in the year.
The business changed from being classified as a subsidiary to an
associate, resulting in a further non-cash gain of GBP5.8
million.
The 2013 comparative comprised GBP3.4 million non-cash gains on
control changes in our Swiss and Indian businesses.
These non-cash gains are considered to be non-operational and so
are excluded from Operating Profit and Underlying EBITDA. The gains
recorded in 2014 are substantial, but are not taxable as they do
not arise in the local books of the business.
Net finance income
The finance income results from interest on deposits held. This
is offset by the unwinding of the present value of the deferred
consideration due on the French business, where an annual charge of
c.GBP0.1 million is expected through to 2017.
Profit before tax
Profit before tax for the year of GBP57.4 million (2013: GBP10.2
million) mainly included the operational profits of the Group, plus
the non-cash gains made on the disposal of the French and Brazilian
operations.
Taxation
The income tax expense was recognised at the tax rate prevailing
in the respective jurisdictions on the estimated taxable profits
for the year. The Group's tax charge has increased to GBP5.6
million (2013: GBP3.4 million) but the Effective Tax Rate ("ETR")
has fallen to 9.8% from 33.3% last year. The Adjusted ETR, after
adjusting for the impact of the other gains, exceptional items,
long-term employee incentive costs, foreign currency translation
differences, amortisation in respect of acquired intangibles and
their associated tax impact, is 22.6% (2013: 37.6%).
The reduction in the Adjusted ETR results primarily from the
recognition of deferred tax assets in the UK and Switzerland and
the reducing corporate tax rates in the UK and Denmark.
The Group pays significant tax on profits made in the UK and
Denmark, but as losses generated in other jurisdictions cannot be
offset against these profits, the Group's ETR is higher than the
prevailing UK corporate tax rate of 21.5%. We expect the Group's
ETR to trend towards this rate over time.
Earnings per share
Basic earnings per share were 9.8p (2013: 1.5p), representing a
553% year-on-year increase.
Adjusted earnings per share were 4.2p (2013: 1.4p), up 200%.
This excludes the impact of non-trading items that fluctuate from
year to year, many of which have no cash impact. The Directors
believe that this adjusted measure more appropriately reflects the
underlying performance of the Group. Adjusted earnings per share is
calculated using the adjusted profit attributable to the holders of
Ordinary shares as set out in the table below.
Year ended Year ended
31 December 31 December
2014 2013
GBPm GBPm
Profit attributable to the holders of
Ordinary shares in the parent 52.0 7.0
Long-term employee incentive costs 4.9 1.7
Exceptional items 2.7 1.0
Other gains (38.2) (3.4)
Foreign currency gains and losses (0.2) 0.6
Amortisation - Acquired intangible assets 2.1 0.8
Tax impact of the adjusting items (0.9) (0.7)
------------ ------------
Adjusted profit attributable to the holders
of Ordinary shares in the parent 22.4 7.0
============ ============
Adjusted EPS excluding acquired amortisation 4.2 1.4
============ ============
The movement year-on-year on both measures is due to the higher
Group profit, partly offset by dilution arising predominantly on
the primary issue of shares on IPO.
Balance sheet
The relatively straightforward business model and low
operational capital expenditure requirements of JUST EAT results in
a simple balance sheet at an operating level. The consolidated
balance sheet is more complex due to the impact of business
combinations.
As at 31 As at 31
December December
2014 2013
Summary balance sheet GBPm GBPm
Non-current assets
Goodwill 51.2 10.2
Property, plant and equipment 7.2 5.5
Other non-current assets 28.4 12.1
86.8 27.8
Current assets
Cash and cash equivalents 164.4 61.6
Other current assets 12.4 4.9
176.8 66.5
Current liabilities (65.6) (38.5)
Net current assets 111.2 28.0
Non-current liabilities
Provisions for liabilities (9.3) (0.1)
Other long-term liabilities
total (4.9) (2.1)
(14.2) (2.2)
Total liabilities (79.8) (40.7)
Net assets 183.8 53.6
Equity
Share capital & share premium 126.2 55.8
Other reserves (6.3) 1.3
Retained earnings/(accumulated
losses) 63.1 (3.9)
Equity attributable to owners
of the Company 183.0 53.2
Non-controlling interests 0.8 0.4
Total equity 183.8 53.6
The non-current assets of the Group have increased by GBP59.0
million to GBP86.8 million. This is a result of the M&A
completed in the year which resulted in the recognition of
goodwill, other intangible assets and increased interests in
associates.
Cash balances have increased mainly due to trading, the net
proceeds from the IPO in April 2014 and the increase in cash held
on behalf of restaurants due to order growth. Restaurant cash of
GBP27.7 million was paid across to them shortly after the
year-end.
Other current assets increased primarily due to the loans issued
to employees and directors in relation to recent Joint Share Option
Plan ("JSOP") grants. There is a corresponding entry in share
capital and share premium and overall the cash impact on the Group
from this transaction was nil.
Current liabilities increased due to growth in our operations,
which increases trade payables and also results in a higher balance
owed to restaurants at the year end. The Group acquired borrowings
of GBP0.5 million as a result of the French acquisition. Of these
borrowings, GBP0.2 million has since been repaid and the remaining
GBP0.3 million will be repaid during 2015.
Non-current liabilities increased by GBP12 million to GBP14.2
million, primarily due to forward contracts to acquire
non-controlling interests.
Cash flow
The Group continued its high level of cash conversion,
benefiting from collecting the gross order value ahead of making
twice monthly net payments to restaurants. In 2014, cash generated
from operations was GBP38.1 million (2013: GBP19.2 million).
Year ended Year ended
31 December 31 December
Underlying EBITDA conversion to Net Cash 2014 2013
from Operating Activities GBPm GBPm
Underlying EBITDA 32.6 14.1
Net change in working capital 12.3 11.6
JSOP loans 5.2 -
Tax cash flow out (4.4) (4.2)
Other 0.3 (0.8)
------------ ------------
Free cash flow before exceptional items 46.0 20.7
IPO costs (2.3) (1.4)
Acquisition costs (0.4) (0.1)
------------ ------------
Free cash flow 43.3 19.2
JSOP loans (5.2) -
------------ ------------
Net cash flow from operating activities 38.1 19.2
============ ============
When compared to underlying EBITDA, this represents a conversion
of 117%. Adjusting for the operational cash flow impact of the
Joint Share Option Plan ("JSOP") which has no impact on the Group's
overall cash flow, this conversion would have been 133%.
Cash flow statement
Year Year
ended 31 December 2014 ended 31 December 2013
GBPm GBPm
Net cash from operating activities 38.1 19.2
Net cash used in investing activities (19.3) (7.7)
Net cash from financing activities 84.2 -
Net increase in cash and cash equivalents 103.0 11.5
Cash and cash equivalents at beginning of year 61.6 50.0
Effect of changes in foreign exchange rates (0.5) 0.1
Net cash and cash equivalents at end of year 164.1 61.6
The Group invested GBP19.3 million in investing activities
during the year. Of this, GBP13.2 million (2013: GBP3.7 million)
was spent acquiring subsidiaries and associates. The GBP3.7 million
Meal2Go acquisition in February enabled us to acquire the
market-leading EPOS technology for the UK takeaway sector and later
in 2014 we acquired the collection-app business Orogo. The Group
strengthened its position in Ireland by buying the number two
operator, Eatcity.ie; in France by acquiring a further 30% stake in
Alloresto for GBP5.8 million; and in Brazil through its merger with
iFood.
The Group raised GBP95.7 million (net of fees) through the
primary proceeds of the IPO and paid a pre-IPO dividend of GBP18.1
million. At the balance sheet date, the Group had cash balances
totalling GBP164.4 million (2013: GBP61.6 million) and borrowings
of GBP0.3 million (2013: GBPnil).
The Board has not recommended a dividend since the IPO, as in
order to deliver longer term value, the Group intends to retain any
earnings to invest in development and expansion as opportunities
arise.
Post balance sheet events
The Group has completed three M&A transactions since the
year end (Mexico, India and Switzerland) and has signed a facility
agreement with a syndicate of banks consisting of Barclays Bank
plc, HSBC plc and RBS plc, for a revolving credit facility for
GBP90 million. This has a one-off fee and will result in an
increase in interest costs for the Group in 2015, depending on the
amount drawn down. As at the date of signing, the facility was
unused.
Directors' responsibility statement
The responsibility statement below has been prepared in
connection with the company's full annual report for the year
ending 31 December 2014. Certain parts thereof are not included
within this announcement.
We confirm to the best of our knowledge:
1. The Group and Company financial statements, prepared in
accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group and Company; and
2. The business review, which is incorporated into the
Directors' report, includes a fair review of the development and
performance of the business and the position of the Group and
Company, together with a description of the principal risks and
uncertainties they face.
The Directors of JUST EAT plc are listed in the Group's Annual
report & Accounts for the year ended 31 December 2014. A list
of current directors is maintained on the Company website,
www.just-eat.com.
By order of the Board,
David Buttress Mike Wroe
CEO CFO
17 March 2015 17 March 2015
Consolidated Income Statement
Year ended 31 December 2014
Year Year
ended 31 ended 31
December December
2014 2013
Continuing operations Notes GBPm GBPm
Revenue 3 157.0 96.8
Cost of sales (16.1) (10.0)
Gross profit 140.9 86.8
Long term employee incentive
costs 4 (4.9) (1.7)
Exceptional items 5 (2.7) (1.0)
Other administrative expenses (113.5) (77.3)
Total administrative expenses (121.1) (80.0)
Share of results of joint venture
and associates (0.8) -
Operating profit 19.0 6.8
Other gains 6 38.2 3.4
Finance income 0.4 0.2
Finance costs (0.2) (0.2)
Profit before tax 57.4 10.2
Taxation 7 (5.6) (3.4)
Profit for the year 51.8 6.8
Attributable to:
Owners of the Company 52.0 7.0
Non-controlling interests (0.2) (0.2)
51.8 6.8
Earnings per Ordinary share
(pence) 8
Basic 9.8 1.5
Diluted 9.4 1.4
Earnings per B Ordinary share
(pence) 8
Basic - -
Diluted - -
Adjusted earnings per Ordinary
share (pence) 8
Basic 4.2 1.4
Diluted 4.0 1.4
Underlying EBITDA
Operating profit 19.0 6.8
Depreciation - Subsidiaries 3.3 2.7
Amortisation - Acquired intangible
assets 2.1 0.8
Amortisation - Other assets 0.6 0.1
Depreciation and amortisation -
Joint venture and associates 0.2 0.4
Long term employee incentive costs 4 4.9 1.7
Exceptional items 5 2.7 1.0
Foreign exchange gains and losses (0.2) 0.6
Underlying EBITDA 3 32.6 14.1
Underlying EBITDA is the main measure of profitability used by
the Group and is defined as earnings before finance income and
costs, taxation, depreciation and amortisation and additionally
excludes the Group's share of depreciation and amortisation of
joint venture and associates, long term employee incentive costs,
exceptional items, foreign exchange gains and losses and 'other
gains'.
Consolidated Statement of Other Comprehensive Income
Year ended 31 December 2014
Year Year
ended 31 ended 31
December December
2014 2013
GBPm GBPm
Profit for the year 51.8 6.8
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation
of foreign operations (2.7) 0.1
Exchange differences on translation
of foreign operations reclassified
to income statement on disposal 3.5 -
0.8 0.1
Items that will not be reclassified
subsequently to profit or loss
Tax on share options 2.3 -
Other comprehensive income for the
year 3.1 0.1
Total comprehensive income for the
year 54.9 6.9
Attributable to:
Owners of the Company 55.1 7.1
Non-controlling interests (0.2) (0.2)
Total comprehensive income for the
year 54.9 6.9
Consolidated Balance Sheet
As at 31 December 2014
As at 31 As at 31
December December
2014 2013
GBPm GBPm
Non-current assets
Goodwill 51.2 10.2
Other intangible assets 12.7 3.4
Property, plant and equipment 7.2 5.5
Investment in joint venture - 7.4
Investments in associates 13.2 0.4
Deferred tax assets 2.5 0.9
86.8 27.8
Current assets
Inventories 0.9 0.8
Trade and other receivables 10.2 3.9
Current tax assets 0.7 0.2
Cash and cash equivalents 164.4 61.6
Associate held for sale 0.2 -
Derivative financial instrument 0.4
176.8 66.5
Total assets 263.6 94.3
Current liabilities
Trade and other payables (59.1) (33.4)
Current tax liabilities (2.0) (1.1)
Deferred revenue (4.0) (4.0)
Provisions for liabilities (0.2) -
Borrowings (0.3) -
(65.6) (38.5)
Net current assets 111.2 28.0
Non-current liabilities
Deferred tax liabilities (2.9) (0.4)
Deferred revenue (1.3) (1.2)
Provisions for liabilities (9.3) (0.1)
Other long-term liabilities (0.7) (0.5)
(14.2) (2.2)
Total liabilities (79.8) (40.7)
Net assets 183.8 53.6
Equity
Share capital 5.7 -
Share premium account 120.5 55.8
Other reserves (6.3) 1.3
Retained earnings/(accumulated
losses) 63.1 (3.9)
Equity attributable to owners
of the Company 183.0 53.2
Non-controlling interests 0.8 0.4
Total equity 183.8 53.6
Consolidated Statement of Changes in Equity
Year ended 31 December 2014
Share Share Shares Other Retained Total Non-controlling Total
capital premium to be reserves earnings interest equity
account issued
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
1 January 2013 0.1 55.6 0.1 1.4 (10.4) 46.8 (0.3) 46.5
Profit for the
year - - - - 7.0 7.0 (0.2) 6.8
Other
comprehensive
income - - - 0.1 - 0.1 - 0.1
Issue of capital - 0.1 (0.1) - - - - -
Share based
payment charge - - - - 1.7 1.7 - 1.7
Adjustments
arising from
changes in NCI - - - - (2.2) (2.2) 0.9 (1.3)
Treasury shares - - - (0.2) - (0.2) - (0.2)
Transfer to
share premium (0.1) 0.1 - - - - - -
-------- -------- ------- --------- --------- ------- ---------------- -------
31 December 2013 - 55.8 - 1.3 (3.9) 53.2 0.4 53.6
Profit for the
year - - - - 52.0 52.0 (0.2) 51.8
Other
comprehensive
income - - - (2.7) - (2.7) - (2.7)
Reclassified to
income
statement - - - 3.5 - 3.5 - 3.5
Issue of capital
(net of
costs) 0.5 96.7 - (0.6) - 96.6 - 96.6
Share based
payment charge - - - - 4.4 4.4 - 4.4
Tax on share
options - - - - 2.3 2.3 - 2.3
JSOP
subscription - 13.2 - (7.9) - 5.3 - 5.3
Exercise of JSOP
awards - - 0.1 - 0.1 - 0.1
Adjustment
arising on
justeat.in - - - - 0.2 0.2 - 0.2
NCI arising on
acquisitions - - - - - - 0.6 0.6
Bonus share
issue 5.2 (5.2) - - - - - -
Capital
reduction - (40.0) - - 40.0 - - -
Dividend for
year - - - - (18.1) (18.1) - (18.1)
Forward
contracts to
acquire
non-controlling
interests - - - - (13.8) (13.8) - (13.8)
31 December 2014 5.7 120.5 - (6.3) 63.1 183.0 0.8 183.8
======== ======== ======= ========= ========= ======= ================ =======
Consolidated Cash Flow Statement
Year ended 31 December 2014
Year Year
ended 31 December ended 31 December
2014 2013
Notes GBPm GBPm
Net cash from operating activities 11 38.1 19.2
Investing activities
Interest received 0.4 0.2
Funding provided to associates (0.1) (0.2)
Net cash outflow on acquisition of interests in joint venture and
associate (4.4) -
Net cash outflow on acquisition of subsidiaries 10 (8.8) (3.7)
Purchases of property, plant and equipment (5.4) (3.3)
Purchases of intangible assets (1.0) (0.7)
Net cash used in investing activities (19.3) (7.7)
Financing activities
Net IPO proceeds 95.7 -
JSOP subscription proceeds 5.3 -
Proceeds arising on exercise of options and warrants 1.1 -
Dividend paid (net of dividends received by the employee benefit
trust) 9 (18.1) -
Repayment of borrowings 0.2 -
Net cash from financing activities 84.2 -
Net increase in cash and cash equivalents 103.0 11.5
Cash and cash equivalents at beginning of year 61.6 50.0
Effect of changes in foreign exchange rates (0.5) 0.1
Net cash and cash equivalents at end of year 164.1 61.6
1. Background
The financial information, comprising of the consolidated income
statement, consolidated statement of other comprehensive income,
consolidated balance sheet, consolidated statement of changes in
equity, consolidated cash flow statement and related notes, has
been taken from the consolidated financial statements of JUST EAT
plc ("Company") for the year ended 31 December 2014, which were
approved by the Board of Directors on 16 March 2015. The financial
information does not constitute statutory accounts within the
meaning of sections 435(1) and (2) of the Companies Act 2006 or
contain sufficient information to comply with the disclosure
requirements of International Financial Reporting Standards
("IFRS").
An unqualified report on the consolidated financial statements
for the year ended 31 December 2014 has been given by the auditors
Deloitte LLP. It did not include reference to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and did not contain any statement under section 498
(2) or (3) of the Companies Act 2006.
The consolidated financial statements will be filed with the
Registrar of Companies, subject to their approval by the Company's
shareholders at the Company's Annual General Meeting on 13 May
2015.
2. Basis of preparation
The Company's consolidated financial statements have been
prepared on the going concern basis in accordance with IFRS adopted
for use in the European Union and those parts of the Companies Act
2006 that are applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on a
historical cost basis, except for certain financial instruments
which have been measured at fair value.
The going concern basis has been adopted in preparing the
consolidated financial statements as the Directors are satisfied
that the Company and its subsidiaries (together the "Group") will
continue to be able to meet their liabilities as they fall due for
the foreseeable future, being a period of at least 12 months from
the date of presenting this financial information.
No new standards or amendments to standards had any impact on
the Group's financial position or performance nor the disclosures
in the consolidated financial information presented.
The underlying EBITDA and adjusted earnings per share measures
provide additional useful information for shareholders and users of
the financial information on the underlying performance of the
business. These measures are used by management of the Group to
measure underlying business performance. Underlying EBITDA is
defined in note 3 and adjusted EPS is defined in note 8.
3. Segmental analysis
The Group has three reportable segments: United Kingdom, Denmark
(core business) and Other. The non-core element of Denmark has been
included in the "Other" segment in the following table. Each
segment includes businesses with similar operating characteristics.
Underlying EBITDA is the main measure of profit used by the Chief
Operating Decision Maker ("CODM") to assess and manage performance.
The CODM is David Buttress, the Group's Chief Executive Officer.
Underlying EBITDA is defined as earnings before finance income and
costs, taxation, depreciation and amortisation ("EBITDA") and
additionally excludes the Group's share of depreciation and
amortisation of joint ventures and associates, long term employee
incentive costs, exceptional items, foreign exchange gains and
losses and 'other gains and losses'. At a segmental level,
Underlying EBITDA also excludes intra-group franchise fee
arrangements and incorporates an allocation of Group technology and
central costs (all of which net out on a consolidated level).
Year Year
ended 31 ended 31
December December
2014 2013
Segment revenue GBPm GBPm
United Kingdom 115.1 69.9
Less inter-segment sales (1.0) (1.1)
United Kingdom 114.1 68.8
Denmark 12.8 11.6
Other 29.8 16.3
Total segment revenue 156.7 96.7
Head Office 0.3 0.1
Total Revenue 157.0 96.8
Total 2014 revenues in Denmark (including the non-core Just
Delivery business, which has been included in the "Other" segment)
were GBP14.6 million (2013: GBP13.3 million).
The Group's revenue is generated as follows:
Year Year
ended 31 ended 31
December December
2014 2013
GBPm GBPm
Commission 119.4 72.7
Payment card and administration fees 21.0 11.9
Connection fees 7.0 5.0
Top-placement 8.0 6.0
Other revenue 1.6 1.2
Total revenue 157.0 96.8
Year Year
ended 31 ended 31
December December
2014 2013
Segment Underlying EBITDA and result GBPm GBPm
United Kingdom 45.9 25.5
Denmark 5.1 4.6
Other (11.8) (11.7)
Total segment Underlying EBITDA 39.2 18.4
Share of equity accounted joint venture
and associates (excluding depreciation
and amortisation) (0.6) 0.4
Head office costs (6.0) (4.7)
Underlying EBITDA 32.6 14.1
Long term employee incentive costs (note
4) (4.9) (1.7)
Exceptional items (note 5) (2.7) (1.0)
Foreign exchange gains and losses 0.2 (0.6)
EBITDA 25.2 10.8
Depreciation - Subsidiaries (3.3) (2.7)
Amortisation - Acquired intangible assets (2.1) (0.8)
Amortisation - Other assets (0.6) (0.1)
Depreciation and amortisation - Joint
venture and associates (0.2) (0.4)
Operating profit 19.0 6.8
Other gains (note 6) 38.2 3.4
Finance income 0.4 0.2
Finance costs (0.2) (0.2)
Profit before tax 57.4 10.2
Property, plant & equipment and intangible assets
Depreciation and
Additions year ended amortisation year
31 December ended 31 December
2014 2013 2014 2013
GBPm GBPm GBPm GBPm
United Kingdom 9.4 1.8 2.6 1.4
Denmark 0.1 0.1 0.2 0.2
Other 50.5 5.2 2.1 1.4
60.0 7.1 4.9 3.0
Head office 0.8 1.4 1.1 0.6
Total 60.8 8.5 6.0 3.6
Additions include goodwill and other intangible assets acquired
as part of business combinations, as well as purchases of tangible
and intangible fixed assets.
4. Long term employee incentive costs
The total expense recorded in relation to the long term employee
incentives was GBP4.9 million (2013: GBP1.7 million). This charge
is comprised GBP4.4 million (2013: GBP1.7 million) in respect of
share based payments and GBP0.5 million (2013: nil) in respect of
employer's social security costs on the exercise of options.
5. Exceptional items
Year Year
ended 31 ended 31
December December
2014 2013
GBPm GBPm
IPO costs 2.3 1.4
Acquisition related expenses 0.4 0.1
Impairment charges - 0.3
Gain on release of contingent consideration provision - (0.8)
Total exceptional items 2.7 1.0
The IPO costs were the costs associated with the Company's
listing and initial public offering in April 2014 that did not
directly relate to the issue of new shares. Further costs of GBP4.5
million were charged to the share premium account.
Acquisition costs relate to legal, third party due diligence and
other third party costs incurred as a result of the Group's
acquisitions.
The 2013 impairment charge of GBP0.3 million was in respect of
the Group's Brazilian CGU.
The 2013 release of contingent consideration was consideration
for the Group's acquisition of a joint venture that did not become
payable as its performance targets were not met.
6. Other gains
Year Year
ended 31 ended 31
December December
2014 2013
GBPm GBPm
Gain in respect of FBA Invest (note 10) 32.0 -
Gain on the disposal of Justeat Brasil Servicos
Online LTDA 5.8 -
Fair value gain on convertible debt 0.4 -
Gain on deemed disposal of Achindra Online Marketing
Private Limited - 0.3
Gain on deemed disposal of Eat.ch GmbH - 3.1
Total other gains 38.2 3.4
7. Taxation
Year Year
ended 31 ended 31
December December
2014 2013
GBPm GBPm
Current taxation
Current year 6.3 3.6
Adjustment for prior years 0.1 (0.1)
6.4 3.5
Deferred taxation
Temporary timing differences (0.8) (0.2)
Adjustment for prior years - 0.1
(0.8) (0.1)
Total tax charge for the year 5.6 3.4
UK corporation tax was calculated at 21.5% (2013: 23.25%) of the
taxable profit for the year. As announced in the March 2013 Budget,
the standard rate of corporation tax in the UK changed from 23% to
21% with effect from 1 April 2014. Accordingly, the effective rate
for the year ended 31 December 2014 was 21.5%.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
Taxation on items taken directly to other comprehensive income
was a credit of GBP2.3m and relates to tax arising on share based
payments.
The total tax charge for the year can be reconciled to the
profit per the income statement as follows:
Year ended 31 December Year ended 31 December
2014 2013
------------------------------
Before Before
adjusting Adjusting adjusting Adjusting
items items Total items items Total
GBPm GBPm GBPm GBPm GBPm GBPm
Profit before tax 28.7 28.7 57.4 10.9 (0.7) 10.2
________
----------- ----- ---------- ----------- -------
Tax at the UK corporation
tax rate of 21.5% (2013:
23.25%) 6.1 6.2 12.3 2.5 (0.1) 2.4
Expenses/(income) non-deductible/(non-taxable) (0.3) 0.4 0.1 (0.4) 0.1 (0.3)
Share based payments - 0.6 0.6 - 0.3 0.3
Profit on the deemed
disposals of businesses - (8.1) (8.1) - (0.8) (0.8)
Adjustments in respect
of prior periods 0.1 - 0.1 0.2 (0.2) -
Effect of different
tax rates of subsidiaries
operating in other
jurisdictions - - - 0.1 - 0.1
Other overseas taxes 1.1 - 1.1 0.9 - 0.9
Change in unrecognised
deferred tax asset (0.5) - (0.5) 0.9 - 0.9
Reduction in tax rate
in UK - - - (0.1) - (0.1)
Total tax charge for
the year 6.5 (0.9) 5.6 4.1 (0.7) 3.4
Effective tax rate 22.6% 9.8% 37.6% 33.3%
The effective tax rate on underlying profits (i.e. profits
before adjusting items) was 22.6% (2013: 37.6%). The adjusting
items are comprised of long term employee incentive costs,
exceptional items, 'other gains', foreign exchange gains and
losses, amortisation in respect of acquired intangible assets and
their associated tax impact.
8. Earnings per share
Basic earnings per share was calculated by dividing the profit
for the year attributable to the shareholders of the Company by the
weighted average number of shares outstanding during the period,
excluding unvested shares held pursuant to the Group's JSOP and
SIP.
Prior to the 8 April 2014, holders of the B Ordinary Shares had
rights to share in profits which differed to those of the holders
of Ordinary shares, Preference A shares, Preference B shares and
Preference C shares. Earnings per share figures have therefore been
presented separately for the B Ordinary shares, up until 8 April
2014. The B Ordinary Shares, Preference A shares, Preference B
shares and Preference C shares were reclassified as Ordinary Shares
on 8 April 2014.
The B Ordinary shareholders were only entitled to dividends
after aggregate distributions of GBP18.25 million had been made to
the holders of Ordinary shares, Preference A shares, Preference B
shares and Preference C shares. Prior to 8 April 2014, aggregate
distributions of this amount had not been made. As a result no
earnings are attributable to the Ordinary B Shares in the earnings
per share ("EPS") calculations.
Diluted earnings per share was calculated by adjusting the
weighted average number of shares outstanding to assume conversion
of all potentially dilutive shares. The Group had potentially
dilutive shares in the form of share options, warrants and unvested
shares held pursuant to the Group's JSOP and SIP.
Adjusted earnings per share is the main measure of earnings per
share used by the Group and is calculated using underlying profit
attributable to the holders of Ordinary shares in the parent, which
is defined as profit attributable to the holders of Ordinary shares
in the parent, before long term employee incentive costs,
exceptional items, 'other gains' (being profits or losses on the
disposal and deemed disposal of operations, and fair value gains
and losses), foreign exchange gains and losses and the tax impact
of the adjusting items. Additionally, adjusted EPS now excludes
amortisation of acquired intangible assets and its tax impact, as
the Directors believe it's a more appropriate measure of the
underlying performance of the Group. This change in the definition
of adjusted EPS did not change the reported adjusted EPS for the
year ended 31 December 2013, of 1.4p.
Basic and diluted earnings per share have been calculated as
follows:
Year ended Year ended
31 December 31 December
2014 2013
GBPm GBPm
Profit attributable to the holders of Ordinary
shares in the parent 52.0 7.0
Long term employee incentive costs 4.9 1.7
Exceptional items 2.7 1.0
Other gains (38.2) (3.4)
Foreign exchange gains and losses (0.2) 0.6
Amortisation in respect of acquired intangible
assets 2.1 0.8
Tax impact of the adjusting items (0.9) (0.7)
Adjusted profit attributable to the holders
of Ordinary shares in the parent 22.4 7.0
Profit attributable to the holders of B Ordinary
shares in the parent - -
Number of shares
('000)
-------------------------
Year
Ended 31 Year ended
December 31 December
2014 2013
Weighted average number of Ordinary shares
for basic earnings per share 533,278 477,792
Effect of dilution:
- Share options 10,713 -
- Unvested JSOP and SIP shares 8,593 -
- Warrants 1,540 5,286
Weighted average number of Ordinary shares
adjusted for the effect of dilution 554,124 483,078
Weighted average number of B Ordinary shares
for basic earnings per share 6,959 21,714
Effect of dilution:
- Share options 2,729 8,651
- Unvested JSOP shares 450 4,439
Weighted average number of B Ordinary shares
adjusted for the effect of dilution 10,138 34,804
Earnings per Ordinary share Pence Pence
Basic 9.8 1.5
Diluted 9.4 1.4
Earnings per B Ordinary share
Basic - -
Diluted - -
Adjusted earnings per Ordinary share
Basic 4.2 1.4
Diluted 4.0 1.4
9. Dividends
On 2 April 2014, the Directors declared a dividend of GBP18.25
million (31 December 2013: nil), to be paid to the holders of
Preference A shares, Preference B shares, Preference C shares and
Ordinary shares pro rata to their holding of shares in the Company.
The dividend was paid, on 8 April 2014, immediately prior to the
reclassification of Preference A shares, Preference B shares and
Preference C shares as Ordinary shares. A small part of this
dividend was earned by Appleby Trust (Jersey Trust) Limited, the
Group's Employee Benefit Trustee. The dividend disclosed in these
consolidated financial statements (GBP18.1 million), is stated net
of the amount of the dividend earned by the Group's Employee
Benefit Trustee.
10. Acquisition of businesses
FBA Invest
SaS
Meal2Go Other Total
GBPm GBPm GBPm GBPm
Fair values of net assets acquired:
Cash 2.8 - 0.5 3.3
Borrowings (0.5) - - (0.5)
Loans from selling shareholders - (0.7) - (0.7)
Intangible assets - Restaurant
contracts 3.4 0.2 0.2 3.8
Intangible assets - Brand 4.1 - - 4.1
Intangible assets - Other 0.4 2.3 0.3 3.0
Deferred tax asset in respect
of losses 0.1 0.2 - 0.3
Deferred tax liability on intangible
assets (2.5) (0.5) (0.1) (3.1)
Receivables 1.2 - - 1.2
Other net assets (7.6) 0.4 (0.1) (7.3)
----------- ---------- -------- --------
1.4 1.9 0.8 4.1
Goodwill 39.7 1.8 1.6 43.1
Non-controlling interest (0.3) - (0.3) (0.6)
----------- ---------- --------
Total consideration 40.8 3.7 2.1 46.6
=========== ========== ======== ========
Satisfied by:
Cash 5.8 3.0 2.1 10.9
Fair value of previously held
interest 25.5 - - 25.5
Fair value of option 9.5 - - 9.5
Capital contribution - 0.7 - 0.7
40.8 3.7 2.1 46.6
=========== ========== ======== ========
Net cash outflow arising on
acquisition:
Cash consideration 5.8 3.0 2.1 10.9
Repayment of shareholder loans - 0.7 - 0.7
Cash acquired (2.8) - (0.5) (3.3)
Debt acquired 0.5 - - 0.5
----------- ---------- -------- --------
Net cash outflow 3.5 3.7 1.6 8.8
=========== ========== ======== ========
FBA Invest SAS
In July, the Group exercised its option to acquire a further 30%
of FBA Invest SaS ("FBA"), which owns 100% of the share capital of
Eat OnLine Sa ("EOL"), the company trading under the brand
ALLORESTO.fr. The consideration paid, of GBP5.8 million, was based
on a pre-determined range of prices set out in the 2011 share
purchase agreement.
As a result of exercising its option the Group owned 80% of FBA
and gained control of it.
At this point, the Group became committed to acquiring the
minority 20% shareholder in 2017. The amount payable in 2017 is
dependent upon the performance of EOL at that time. The Directors
have estimated that the amount payable in 2017 will be EUR6.9
million. As a result a provision of GBP5.6 million was established
in July 2014, being the discounted Pound Sterling amount of the
estimated amount payable.
Up until July 2014, the Group's 50% interest in FBA was
accounted for as a joint venture using the equity accounting
method. From the time the Group obtained control of FBA, in July
2014, FBA and EOL were accounted for as subsidiaries.
A gain of GBP32.0 million was recognised as a result of the
transactions surrounding the acquisition of FBA. This gain was
comprised as follows:
GBPm
Gain on deemed disposal of joint venture interest
in FBA 17.8
Fair value gain in respect of the second completion
option 9.5
Fair value gain in relation to minority shareholder
buy-out 4.7
Total gain recognised in the income statement 32.0
The gains are based on the Directors' valuation of FBA and
EOL.
The FBA acquisition accounting is provisional in respect of
certain liabilities for which more information as to their fair
value may come to light in the future.
Meal2Go
On 27 February 2014, the Group acquired the entire share capital
of Meal2Order.com Limited ("Meal2Go") for cash consideration
totalling GBP3.7 million, including the repayment of loans from the
selling shareholders, of GBP0.7 million. The Group obtained control
of Meal2Go and as a result the acquisition has been accounted for
as a business combination in accordance with IFRS 3.
Meal2Go was principally acquired for its leading EPOS
(Electronic Point-Of-Sale) technology, specifically designed for
the takeaway industry.
Other Acquisitions
Orogo Limited
On 10 July 2014, the Group acquired 45% of the ordinary share
capital of Orogo Limited ("Orogo"). On the same day it increased
its holding to 60% through a share subscription, providing working
capital to the business.
Orogo is an innovative collection only app, which enables
consumers to order and pay for their lunch in advance and collect
at their convenience, from some of central London's most popular
restaurants.
The Group is committed to acquiring the minority shareholdings
in Orogo in 2017 for consideration based on the performance of the
business at that time. A provision of GBP3.6 million was
established for this commitment, being the discounted (for the time
value of money) fair value of the estimated consideration payable.
GBP3.6 million has been charged to equity as a result.
Eatcity.ie
On 3 November 2014, the Group acquired 100% of the ordinary
share capital of Eatcity Limited ("Eatcity"), which traded as
Eatcity.ie in Ireland. The Group obtained control of Eatcity and as
a result the acquisition has been accounted for as a business
combination in accordance with IFRS 3.
Menu Express and Delivery Town
During 2014, Just Eat Canada Inc purchased the assets of two
small businesses.
11. Net cash inflow from operating activities
Year
ended 31 Year ended
December 31 December
2014 2013
GBPm GBPm
Operating profit for the year 19.0 6.8
Adjustments for:
Share of results of joint venture and associates 0.8 -
Depreciation of property, plant and equipment 3.3 2.7
Amortisation of intangible assets 2.7 0.9
Non-cash long term employee incentive costs 4.7 1.7
Other non-cash items (0.3) (0.3)
Operating cash flows before movements in
working capital 30.2 11.8
Increase in inventories (0.2) (0.3)
Increase in receivables (6.8) (0.2)
Increase in payables 19.2 10.6
Increase in deferred income 0.1 1.5
Cash generated by operations 42.5 23.4
Income taxes paid (4.4) (4.2)
Net cash inflow from operating activities 38.1 19.2
12. Related party transactions
On 24 March 2014, prior to the IPO, the Company called all the
unpaid subscription amounts, totalling GBP13.2 million, in respect
of certain shares issued under the JSOP. In order to facilitate
this, the Company made loans to participants of the JSOP and
Appleby Trust (Jersey Trust) Limited totalling GBP5.3 million and
GBP7.9 million, respectively. The loans provided to the
participants of the JSOP included loans to key management personnel
totalling GBP4.9 million. As at 31 December 2014, the amount due
from key management personnel in respect of these loans was GBP4.8
million (2013: nil). This included GBP3.0 million in respect of
Directors of the Company (2013: nil).
The total compensation (including the IFRS 2 Share Based Payment
charge for share awards) of key management personnel for the year
ended 31 December 2014 was GBP4.7 million (2013: GBP3.0
million).
During the year ended 31 December 2014 dividends totalling
GBP0.3 million (2013: nil) were paid to key management personnel.
Of this GBP0.2 million (2013: nil) was paid to Directors of the
Company
13. Post balance sheet events
On 22 January 2015 the Group acquired the minority shareholdings
in eat.ch GmbH, the Group's Swiss trading subsidiary. As a result,
the Group's stake increased from 64% to 100%. As eat.ch GmbH was
already consolidated as a subsidiary the acquisition will have no
impact on the Group's revenues or underlying EBITDA.
On 11 February the Group acquired a further 5% stake in IF-JE
Participações Ltda ("IF-JE"), the Group's Brazilian associated
undertaking, bringing its total stake to 30%. The consideration
payable is dependent upon the future performance of IF-JE and is
payable in instalments over the period to 31 October 2016.
Following the acquisition of the further stake, IF-JE will continue
to be accounted for as an associated undertaking. As IF-JE is
currently loss making the acquisition of a further stake will
initially have a small negative impact of the Group's Underlying
EBITDA.
On 13 February the Group acquired the entire share capital of
Sindelantal Mexico SA DE CV "Sindelantal Mexico"). Sindelantal
Mexico is the market leader in mobile and online takeaway in
Mexico. It has approximately 2,500 restaurant partners and
generates over 50,000 orders per month. Given the timing of the
acquisition, it has not been possible to determine the fair values
of the assets and liabilities acquired. As Sindelantal Mexico is
currently loss making the acquisition will initially have a
negative impact of the Group's Underlying EBITDA.
The total consideration for the above acquisitions is expected
to be around GBP35 million.
In January the Group sold its shares in Achindra Online
Marketing Private Limited, the Group's Indian associated
undertaking, to foodpanda. Prior to the disposal the investment was
accounted for using the equity accounting method. As a consequence
the sale will have no impact on the Group's revenues and a small
positive impact on Underlying EBITDA, as the Group will no longer
recognise a share of the entity's losses. The Group will recognise
its investment in foodpanda's Indian holding company at fair
value.
In March the Group signed a GBP90 million revolving credit
facility agreement with a syndicate of banks consisting of Barclays
Bank plc, HSBC plc and RBS plc. This has a one off fee and will
result in an increased interest costs for the Group in 2015,
depending on the amount drawn down. As at the date of signing the
financial statements no debt has been drawn down.
5. The content of the JUST EAT web site should not be considered
to form a part of or be incorporated into this announcement.
6. Based on a UK survey conducted by YouGov of adult takeaway
users.
7. Excluding depreciation and amortisation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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