Just Eat unveils EUR150m share buyback a month after cutting 1,700 staff
The takeaway delivery group Just Eat has announced plans to buy back up to EUR150m (?132m) of shares from investors weeks after cutting 1,700 couriers in the UK as part of a plan to scrap guaranteed minimum wage and paid holiday.
The company announced the share buyback plan alongside data showing a 14% drop in orders and an 8% slide in sales in the first three months of the year. Takeaway sales have fallen back after demand soared during the pandemic.
The share buyback, which is a way of returning funds to investors by improving the returns of their holdings, comes as the London and Amsterdam-listed Just Eat faces potential legal challenges from couriers in the UK.
The law firm Leigh Day, which was involved with successful similar action against ride-hailing app Uber, said it was working with five claimants but expected to sign up more.
Most UK couriers working for the company, which is endorsed by the rapper Snoop Dogg and singer Katy Perry, are classified as self-employed independent contractors.
Just Eat had offered more than 2,000 of its UK personnel a”worker” status that guarantees holiday pay, at least the legal minimum wage an hour worked and other benefits including pension rights. However, it announced last month it was scrapping those contracts and making all couriers self-employed in the UK, in line with rivals such as Deliveroo.
Now some couriers are challenging their status in court, after successful legal action by drivers for Uber and similar cases against Bolt, Amazon and Addison Lee.
Nigel Mackay, a partner in the employment team at Leigh Day, which is leading the action, said:”Working as part of the gig economy should not mean you are not paid a fair wage, yet time and time again this is what we are hearing from people who reach out to us for help.’
A Just Eat spokesperson said: “Just Eat provides a self-employed independent contractor service model that provides flexibility for riders. Under a self-employed system, couriers are able to accept deliveries that work for them.
“We remain committed to providing a model that works for couriers, and take any concerns raised by couriers on our network seriously.”
Just Eat said a revival in its fortunes was on the way – led by northern Europe, where sales were flat in the quarter compared with the same period a year ago, and the UK and Ireland, where sales fell by just 1%.
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The company said it expected to make underlying profits of EUR275m, EUR50m more than previously predicted, saying sales could rise by up to 2% for the year – although it admitted they could fall back by as much as 4%.
Neil Shah, the director of strategy at the consulting firm Edison, said JustEat’s downturn in orders reflected the fact that “delivery services [are] no longer running on the fuel of lockdowns”.
He added: “Moreover, consumer habits over the past year were impacted by more than just the end of the pandemic. Demand for fast food has swiftly transitioned into demand for cheap food – the cost-of-living crisis deterring consumers from splashing out on deliveries – and the downturn in Just Eat’s [sales figures] certainly reflect this trend.”