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.