Just Eat profits up amid merger pressure
Food delivery service Just Eat has defended itself against a disgruntled shareholder by reporting a sharp rise in 2018 revenue.
Fund manager Cat Rock has been calling on the delivery company to seek a merger with a rival.
But Just Eat's chairman Mike Evans said the "strategy set out last year is working".
Revenue rose 43% to £779.5m, while it reversed a loss in 2017 to report profits of £80m.
The company said it expected its full-year revenue in 2019 to be between £1bn to £1.1bn.
The company said one-fifth of the adult population in the UK used its services, while its delivery business in Canada - SkipTheDishes - was growing rapidly after the introduction of a bilingual service.
Peter Duffy, the interim chief executive, said four million new customers joined the business last year.
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"We have a clear plan for the year ahead as our highly experienced team works hard to accelerate the execution of our strategy and we remain focused on long-term returns for shareholders," said Mr Duffy, the chief customer officer, who is currently running the business after the sudden departure of Peter Plumb in January.
He said he did not want to be a candidate for the chief executive role permanently.
His remarks were welcomed by US investor Cat Rock, which owns about 2% of the company and has been complaining that its slow pace of planning and decision-making will "result in competitors eroding Just Eat's leading market position".
"We respect and appreciate Peter Duffy's decision to withdraw from the CEO search process, allowing the board to secure a leader with the appropriate online food delivery experience," Cat Rock said.
"We believe that a merger with a well-run industry peer is a very attractive avenue for securing world-class leadership, delivery expertise, and a premium."
Just Eat is coming under pressure from rivals such as Uber Eats, which is cutting the fees it charges restaurants and has reportedly considered a merger with rival Deliveroo.
Julie Palmer, partner at Begbies Traynor, said Just East needed to be wary of the threat of rivals. "Although 2018 has proved a successful year for the firm, 2019 is set to be one of its most challenging to date. With increased competition and greater fiscal red tape, Just Eat will need to get the ingredients just right if it's to continue to enjoy a sizeable slice of the market share," she said.
A sharp fall in its share price forced it out of the FTSE 100 index last year, but Cat Rock said the shares were up 35% since December when it first started to call for change.
"There will no doubt be significant disappointment if the board fails to deliver on the opportunity to create value for all Just Eat shareholders," Cat Rock said.
The shares were up 1% in late trading.