Investor Cat Rock digs claws into Just Eat over performance

Just Eat

Just Eat has been described by one of its shareholders as the worst-performing online food firm in the world as it called for a radical shake-up.

Cat Rock Capital, which owns 2% of the firm, on Monday urged Just Eat’s board to “address key issues” and sell off non-core assets, such as its interest in the iFood business in Brazil and other non-European businesses.

The US investment firm also said Just Eat should come up with a three-year financial plan but, if the board fails to execute it, Just Eat “should begin to consider strategic alternatives for the business”.

Just Eat’s shares have declined almost 30% in 2018 and now trade near the same “absolute price as two years ago”, Cat Rock Capital said, despite achieving 100% revenue growth over the same period.

It also pointed to the fact that Just Eat was recently ejected from the FTSE 100 index.

In a letter to the Just Eat board, Cat Rock called for more-demanding long-term profit targets, to properly align executive pay with performance and for the group to sell off non-core assets.

Cat Rock founder and managing partner Alex Captain said: “Shareholder frustration with management’s lack of accountability for delivering on this potential continues to damage Just Eat’s value and performance.

“As we have discussed with the board, we believe the first step toward addressing this problem is clear: it must urgently lay out a three-year plan commensurate with Just Eat’s potential and link management’s remuneration directly to the achievement of that plan, aligning their interests with those of shareholders.”

Mr Captain said the sale of Just Eat’s minority stake in iFood could generate as much as £650 million.

Just Eat is desperately attempting to keep up with with Deliveroo and Uber, firms that have been muscling in on its territory of late.

Speculation that Uber is in early talks to buy rival Deliveroo has also recently hit Just Eat’s shares.

“Just Eat’s shareholders have been very patient, but online food delivery is a rapidly evolving sector. Further delays in planning and decision-making will only continue to destroy shareholder value,” Mr Captain added.

Shares in Just Eat were flat in morning trade at 578p.

A Just Eat Group spokesman insisted that the firm has a “clear strategy” in place to deliver long-term value for shareholders.

He added: “As you would expect, the board engages closely with shareholders to ensure management have an appropriate long-term incentive programme aligned to the exciting and unique growth opportunities of the Just Eat group.”