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IHE 2008

Industry news

Just Eat chief executive Peter Plumb makes surprise exit

Time: 2019-01-25 15:28   Source: IFE China   Clicks:

The Just Eat chief executive, Peter Plumb, is stepping down with immediate effect, only 16 months after he joined the British takeaway ordering website and launched an investment drive that slowed earnings growth.

Plumb, who joined from on a base salary of £695,000, upgraded Just Eat’s technology and launched its own delivery service to address intensifying competition from Deliveroo and Uber Eats.

However, the new strategy demanded more and more investment, causing earnings momentum to slow sharply. Plumb is understood to have caused disquiet from multiple top shareholders after he said he did not foresee increased profit margins from the business in the coming year and failed to make a persuasive case for investment.

Pressure from shareholders increased last month when the activist investor Cat Rock Capital Management publicly called for management to give financial targets to the market as well as considering selling businesses such as its stake in the Brazilian market leader iFood. Other major investors are understood to have expressed some similar concerns to Just Eat’s management in private.

Its shares, which have fallen 18% in the past 12 months, were down 1.2% at 650p on Monday. The share price fall over the past year led to the company being demoted from the FTSE 100 in December, a year after it first joined the blue-chip index.

Just Eat declined to give details of any severance payments to Plumb. On top of his £695,000 base salary Plumb was entitled to a bonus of up to £1m a year and share awards of up to £1.4m a year.

Peter Duffy, previously Just Eat’s chief customer officer, has been appointed as the interim chief executive. A search for a permanent replacement began on Monday, with Duffy among the contenders to take on the role permanently.

Just Eat on Monday said it expects margins in its marketplace business, which links customers to restaurants who take care of their own deliveries, to increase year on year.

It also said its Canadian delivery business, SkipTheDishes, is on track to turn a profit in 2019 for the first time, signalling that it has a “route to profitability for delivery services”. Large takeaway food delivery rivals around the world, including Uber Eats and Deliveroo, have been making heavy losses as they battle for market share.

“Peter Duffy and the senior leadership team will continue to drive the execution of our strategy, which has the full backing of the board,” the chairman, Mike Evans, said.

Just Eat also said it expected to report 2018 revenue of about £780m and underlying core earnings between £172m and £174m, both slightly ahead of analysts’ consensus forecast.