Just Eat profits getting fatter as Britain guzzles more takeaway food

Just Eat said it now expects full year profits to be larger than previously indicated after the number of famished Britons ordering takeaway food online continued to increase in the first three months of the year.

Total orders were 57% higher in the first quarter compared to the same period last year, the same rate at seen across 2015.

Like-for-like orders were also up 41%, though this was down slightly from the 46% rate over the whole of last year.

At the beginning of April, the FTSE 250 company upped the commission rate for existing UK restaurants by one percentage point, alongside a change from twice monthly to weekly payments, which it said would not only improve partners restaurants' cash flows significantly but also improve Just Eat's earnings before interest, tax, depreciation and amortisation (EBITDA).

"The initial response to these changes has been positive," it said.

As a result of the UK commission rate change, directors increased their guidance for full year revenues to £358m, based on current exchange rates, up from £350m indications given in early March.

This will feed through to improved profits, which, allowing for reinvestment in growing the business, is expected to see underlying EBITDA of £102-104m for the full year, up from the previous guidance of £98-100m.

Chief executive David Buttress hailed the excellent start to 2016, highlighting improvements to both the consumer offering and restaurant support, which he said were "working" and left the company "well positioned to continue benefitting from channel shift in the category".

The strongest order growth in the quarter came from the UK, which delivered a 40% increase, while order growth in Denmark was higher and at better margins and the newly acquired businesses in Italy, Brazil, Mexico and Spain were said to have remained strong.

The businesses in Italy, Brazil and Mexico were acquired in February, while the Spanish purchase of La Nevera Roja closed on 4 April.

A joint venture in Latin America, iFood, achieved 160% order growth in Brazil in the first quarter.

Just Eat said the commercial roll-out of its new Orderpad technology to UK restaurants remained "on target", bolstered by the strengthening of the tech team from the addition of ex-Microsoft man Fernando Fanton as chief product and technology officer.

Shares in Just Eat were up 7.7% to 412.9p by 0900 BST on Tuesday.