Simplifying Operations and Cutting Costs

Just Eat Takeaway, a leading online food delivery company, has announced plans to delist from the London Stock Exchange (LSE) by 27 December. The Netherlands-based firm, primarily listed in Amsterdam, aims to reduce costs and administrative burdens by consolidating its listings. The move reflects its focus on operational efficiency, especially as trading volumes in London remain low.

Another Setback for the London Stock Market

The decision adds to a growing list of companies leaving the LSE, including major players like Tui, CRH, and Flutter. Businesses are increasingly shifting their listings to other markets, such as the US, seeking better valuations and reduced regulatory complexities.

Why Just Eat is Leaving London

Just Eat Takeaway cited several reasons for the delisting, including:

• High Regulatory Costs: Meeting LSE's disclosure requirements was deemed costly and complex.
• Low Trading Volumes: Minimal share activity in London reduced the strategic value of maintaining a secondary listing.
• Efficiency Goals: The company is consolidating resources to accelerate growth and focus on its core operations.

The company also noted that most of its trading activity already occurs on its primary listing at Euronext Amsterdam.

Past Moves in Streamlining Listings

This is not Just Eat's first move to simplify its trading strategy. In 2022, it delisted from the Nasdaq, citing low trading volumes and limited shareholder value. Later that year, the company shifted its LSE status from “premium” to “standard” to reduce compliance costs.

Market Analysts Weigh In

Investment analysts believe this trend might continue among companies with secondary listings in London, despite new UK rules introduced in July to attract more firms. Dan Coatsworth from AJ Bell remarked that these changes are too recent to gauge their effectiveness. Meanwhile, analysts from Panmure Liberum and Bryan, Garnier & Co interpret Just Eat’s decision as a strategic shift towards a leaner, more focused business model.

Continued Commitment to the UK Market

Despite the delisting, Just Eat Takeaway reassured its commitment to the UK. The company covers 97% of the UK population and continues to invest in maintaining its leadership position in the region. This focus aligns with its broader strategy of rationalising operations and enhancing profitability.

A Step Towards Strategic Realignment

The announcement comes as the company works to recover from significant losses following its acquisition of Grubhub in 2021. Having recently sold Grubhub for $650 million after purchasing it for $7.3 billion, the move to streamline listings aligns with efforts to rebuild shareholder confidence and refine its geographic portfolio.

Source: (FT.com)