Just Eat, the online takeaway food service, is expected to achieve a valuation in the range of £700m to £900m

Last updated: March 17, 2014 8:28 pm

Just Eat joins growing queue of London IPOs

By Andy Sharman and Sally Davies

Just Eat has confirmed its intention to join the swelling ranks of companies lining up to float in London.

The online takeaway food service, which is expected to achieve a valuation in the range of £700m to £900m, on Monday said it planned to raise £100m and list on either the main market or the London Stock Exchange’s High Growth Segment, designed to lure entrants from the capital’s flourishing start-up scene.

The initial public offering would mark the biggest local exit for a company from London’s “Tech City” hub, which has been dogged by its failure to produce digital successes to rival the likes of Facebook and Twitter.

Just Eat would be following in the footsteps of a rush of companies listing in London this year – from fridge seller AO World and rabbit retailer Pets at Home to fast fashion company Boohoo.com – as groups seek to tap rising investor demand for IPOs.

Founded in Denmark in 2001, Just Eat is the leading online delivery service in the UK’s takeaway food market, which is thought to be worth £4bn-£5bn a year. Its platform processed 40m orders last year and churns through 900 orders a minute, said chief executive David Buttress.

He added, however, that Just Eat’s technology platform did not contain any legally protected proprietary innovations. “We consider our IP to be our brand and how we execute as our brand,” he said.

The company plans to open up the platform to restaurants that do not offer a delivery service, so that customers can place and collect orders, Mr Buttress said.

“We believe collection will become a growing part of our business,” he said, adding that Just Eat would add higher quality restaurants to the small takeaway groups that dominate its service. “We want to give consumers the full choice of restaurants.”

Mr Buttress also said the company was looking to expand through “potential acquisitions”.

Just Eat generated £96.8m in revenues in 2013, up more than 60 per cent on the year before, and underlying earnings before interest, tax, depreciation and amortisation of £14.1m, compared with £2.3m in 2012.

The company said that online takeaway orders had been found to be on average 30 per cent higher in value than traditional over-the-telephone orders. Mr Buttress said this was because consumers decided on an order before making a phone call, whereas shopping online gave them the option to “shop the entire menu”.

Goldman Sachs and JPMorgan Cazenove are joint global co-ordinators, joint bookrunners and, in the event the company acquires a main listing, joint sponsors on the IPO. JPMorgan Cazenove will be key adviser if a listing on the High Growth Segment is pursued. Oakley Capital is co-lead manager.

Just Eat said on Monday it had added Andrew Griffith, chief financial officer of BSkyB, and Gwyn Burr, a former customer services director at Asda, to its board as independent non-executive directors.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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