Just Eat is to be promoted to the FTSE 100 next month – its market value having soared by more than a third this year on the back of global expansion and a surge in sales.
It was confirmed on Wednesday night that the takeaway delivery platform would join the top flight along with packaging firm DS Smith and Halma – a safety solutions specialist.
The quarterly review of market constituents by operator FTSE Russell will see Merlin Entertainments – the company behind Alton Towers and Madame Tussauds – drop out to the FTSE 250 index along with ConvaTec Group and Babcock International.
It was Just Eat’s meteoric rise in value that dominated market talk in advance of the review – its capitalisation surpassing that of Sainsbury’s, M&S and Morrisons to stand, this week, at £5.4bn.
Who’d have thought back in 2001 that we’d be joining the FTSE 100 in 2017? A massive thank you to all our restaurant partners, customers and employees who’ve been on this amazing journey with us. We couldn’t have done it without you. pic.twitter.com/hYqYVDG24X
— JUST EAT PLC (@JustEatPLC) November 29, 2017
Its shares are almost 37% higher in the year to date. It only floated in 2014 at 260p per share. Those shares are now worth just shy of 800p each.
The idea was simple. To connect restaurants with customers unable or unwilling to leave their homes and deliver food to them. It has almost 30,000 eateries signed up to its restaurant partnership programme in the UK alone.
It has expanded to Australia and New Zealand, Mexico and across large swathes of Europe while its latest takeover, of rival Hungryhouse, was recently cleared by the UK’s competition regulator.
Russ Mould, investment director at AJ Bell, said of the firm’s promotion: “This shows how the internet places a focus not just on price but on service and Just Eat’s success is testimony to its ability to harness the power of both technology and consumer satisfaction.
“The asset-light model relies on partners and word of mouth (customer reviews) as well as its scalable platform in a great example of how the internet can be used to create a powerful and profitable business model.”
Merlin’s fall from grace reflected a collapse in its share price, down 20% in a single day at one stage, when it admitted core summer trading had taken a hit from the heightened terror threat level and it was cutting investment as a result.
It came as a shock to investors as the company had previously been benefiting from higher revenues on the back of the weak pound boosting its bottom line in Europe and higher tourism to the UK.
The promotions and relegations take effect on Monday 18 December.