Home news Just Eat set to join blue chip index after share price jump

Just Eat set to join blue chip index after share price jump

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An online takeaway firm is set to join the ranks of Britain’s biggest businesses this week.Just Eat is expected to be promoted to the FTSE 100 on the back of its soaring share price, and comes just three years after its stock market debut.Its elevation would make it the first such firm to join the blue chip index.The next FTSE reshuffle is based on closing share prices on Tuesday, with engineer Babcock and Alton Towers-owner Merlin at risk of demotion.Just Eat’s shares have soared 43% this year on the back of revenue growth and acquisitions. It’s £5.5bn market value makes it bigger than Sainsbury’s.Just Eat takes online orders from customers and acts as delivery middle man between them and restaurants.Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Just Eat’s growth underlines changing consumer habits and the impact of consumer-facing tech firms.”Reshuffles in and out of the FTSE 100 are somewhat symbolic but can highlight companies whose stars are in the ascendancy, Just Eat being a good example – having only floated a little over three years ago,” he said.”Customers are fast-adopting online ordering as their default order route, and Just Eat has been growing orders and revenues at a rate of knots.”Earlier this month, the Competition and Markets Authority cleared Just Eat’s £240m takeover of rival Hungryhouse.DemotionBabcock, one of the UK’s oldest engineering firms, has seen its share price hit on concerns about defence spending, and is one of the companies most likely to be demoted to the FTSE 250.Merlin, which also owns Madame Tussauds and the London Eye, has seen visitor numbers tail off in response to the heightened UK threat level, with the blame also being pinned on poor late summer weather across the UK and northern Europe.The third company tipped for FTSE 100 ejection is hospital group Mediclinic International, which recently ended takeover talks with Spire Healthcare.In addition to Just Eat’s promotion, Mr Hyett says paper packaging business DS Smith and Halma, a health and safety technology company, are on course to join the FTSE 100.Changes to the FTSE 100 and 250 will take effect in mid-December.
Source: BBC News

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