Shares in Just Eat go stale as investor appetite sours

SHARES in Just Eat slid after one broker’s taste for the takeaway delivery company rapidly soured.

Analysts at Peel Hunt switched their recommendation for investors on Just Eat from ‘Buy’ to ‘Sell’, saying the firm is under siege from Uber and Deliveroo.

Peel Hunt had sounded upbeat on Just Eat, as the popularity of home-delivered food soared and it continued to pull restaurants onto its online platform.

The takeaway business had stuck to building an online marketplace for restaurants which already had delivery fleets to sell to customers, meaning it didn’t have to pay its own fleet of drivers. This structure initially looked attractive but is now a weakness.

Uber, which has a food delivery service alongside its more wellknown taxi app, and Deliveroo both have networks of drivers, drawing a host of restaurants to their platforms which never previously offered takeaway food.

Even though Just Eat is playing catch-up, investing millions of pounds in developing its own fleet alongside a marketplace, reports that Uber is in talks to acquire Deliveroo have shaken confidence in Just Eat’s ability to compete.

Analyst James Lockyer said that if Uber and Deliveroo were to join forces, this could create ‘an Uberoo-esque wave that eventually sees the demise of Just Eat’.

Lockyer predicted Uber Eats would dominate in grabbing customers who order from their smartphone. In a ‘winner takes all’ market, this could shunt Just Eat into the background.

Just Eat, which elbowed its way onto the FTSE 100 late last year, saw its shares slip by 1.2pc, or 7.4p, to 594.4p. Neither Uber nor Deliveroo are currently listed. Russian steel manufacturer

Evraz, on the other hand, helped to pull up the blue-chip index after it revealed its North American division was considering building a rail mill in its Colorado steelworks. Evraz said the new plant would produce 100-metre long rails. Currently it can only produce rails of up to 25 metres.

Shareholders were positive on the proposals, causing shares to climb 4.5pc, or 22.4p, to 525.4p.

Along with HSBC (which rose by 4.8pc, or 28.8p, to 633.8p after reporting strong results), Evraz helped to push the FTSE 100 up 1.25pc, or 86.76 points, to 7026.32.

On London’s junior market, flooring company Victoria plummeted as it warned its margin – or the difference between its revenue and expenses – would fall below market expectations.

It blamed this on its push to steal business from competitors, which it said was still the right strategy as it had helped to increase sales by more than 5pc.

Even though the 123-year-old company said revenues would probably come in ahead of expectations, shares plummeted by 24.7pc, or 149p, to 455p. Pharmaceutical company N4

Pharma, however, shot up as it released new research into a tiny particle designed to deliver DNA to cells in the body, which could theoretically stimulate them to fight diseases such as cancer.

The particle triggers the body’s immune response, which should help simplify and reduce the cost of vaccines. Shares climbed 21.4pc, or 1.1p, to 5.95p.

Healthcare company Concepta also received a boost as its fertility self-test kit received certification that means it satisfies all rules in the European Economic Area. The MyLotus platform, designed for women who are struggling to become pregnant, will be accompanied by testing products such as a urine monitor which measures hormone levels.

The firm said certification was a ‘major milestone’. Shares shot up by 18.3pc, or 0.55p, to 3.55p.