July 31, 2019 / 5:37 AM / 22 days ago

Takeaway, Just Eat orders jump as they prepare to merge

AMSTERDAM (Reuters) - Food delivery companies Takeaway.com (TKWY.AS) and Just Eat (JE.L) reported strong order growth for the first half of 2019 on Wednesday, as they gear up for their planned $10 billion merger announced earlier this week.

The Dutch and British companies on Monday said they had agreed in principle to an all-share merger to create a company that would rival Uber Eats (UBER.N) as the world’s largest food delivery company outside China.

This deal comes only months after Takeaway’s 930 million- euro (£822.9 million) acquisition of the German business of rival Delivery Hero, which settled a costly battle for market domination in Germany.

Scale is all-important in the fast-growing $100 billion market as rivals scramble to offer consumers the biggest choice. Most players are still loss-making as they spend heavily on marketing and acquisitions.

Takeaway said its move in Germany had helped total sales up 68% to 185 million euros in the first half of the year, as orders increased at the same pace.

Just Eat reported a 21% increase in orders for the first half of 2019, as the company, previously a purely online business connecting restaurants and consumers, rolled out its own food delivery network.

Takeaway reported an operating profit of 1.8 million euros, marking the company’s first positive result since listing its shares in Amsterdam in 2016, while Just Eat’s core profit fell to 72 million pounds.

Takeaway said it continued to see growth as a priority over profitability, as online food delivery is still relatively undeveloped in many European economies.

“Creating profit is not what we are after”, Chief Executive Jitse Groen told reporters. “It is a result of what we do. The nature of our business is to grow and while doing that, we try to become more efficient.”

Just Eat maintained its outlook for total revenues of 1 to 1.1 billion pounds in 2019, and a 185-205 million-pound core profit (EBITDA). Takeaway provided no outlook.

Just Eat shares were up 2.2 percent by 0856 GMT, while Takeaway rose 1.3 percent.

Reporting by Bart Meijer; Editing by Shounak Dasgupta, Stephen Coates and Georgina Prodhan

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