Just Eat Takeaway.com has raised its adjusted core profit outlook for this year, saying on Wednesday it was ahead of plan in delivery-led operational improvements, although food orders have fallen.
It also announced a share-back buyback programme of up to €150 million ($164.34 million) to be completed by the end of the year, which it said would improve earnings per share.
The food delivery sector was among those boosted by the COVID-19 pandemic, but the effect has waned as consumers, faced with surging prices, have cut discretionary spending.
Europe's biggest meal delivery company expects adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of €275 million ($301.6 million) in 2023.
It had in January forecast adjusted EBITDA of €225 million.
At the same time, its first quarter trading update reported a drop in total orders to €227.8 million, 14% below last year's level.
The Dutch-listed company said it expected its gross transaction value (GTV) growth to be in a range of -4% to +2% year-on-year in 2023 after a GTV of €6.67 billion, down 8% year-on-year, in the first quarter.
It said it expected free cash flow to turn positive in mid-2024.
Just Eat's cash flow has yet to emerge from the red and since its IPO in 2016, the share price has lost nearly 30% of its original value.
Shares Rise And Fall
On Wednesday, its share price initially rose only to fall by 4% at 0737 GMT.
Analysts were cautious.
"For us it becomes more and more clear that JET’s financial growth profile (and hence its multiple) depends almost solely on margin expansion (in the absence of top-line growth) and visibility remains low," J.P Morgan analysts said in a note.
Read More: Just Eat Takeaway Swings To Small 2022 Core Profit, Sees Better 2023
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