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5 FTSE 250 Gatecrashers: Just Eat PLC, AO World PLC, Pets at Home Group PLC, Brit PLC and Poundland Group PLC

Stock market flotations have been coming thick and fast in recent months. Five newly listed companies have just gatecrashed the FTSE 250: Just Eat (LSE: JE), AO World (LSE: AO), Pets at Home (LSE: PETS), Brit (LSE: BRIT) and Poundland (LSE: PLND).

Here’s my take on these mid-cap newcomers.

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Just Eat

The online takeaway-ordering service, which has signed up 30,000 restaurants in 13 countries, was floated at 260p a share in April. The shares are currently down 5% at 246p.

Just Eat recently reported that orders for the first three months of the year were up over 50% on the same period last year. Analysts’ full-year forecasts put the company on a stratospheric P/E of 182. While Just Eat has a highly scaleable business model, and has proved adept at adapting its basic website and advertising for local markets, companies with mega-P/Es just don’t appeal to me.

AO World

The UK’s leading online retailer of major domestic appliances, which plans to conquer Europe — starting with Germany — was floated at 285p a share in March. The shares are currently down 12% at 251p.

AO World reported maiden full-year results last week. Revenue was up 40%, but the company made a bottom-line loss due to flotation costs. However, even stripping out these costs, the P/E works out at 167. I reckon AO World has a tougher job than Just Eat in replicating itself in other markets — and, unlike the takeaway group, has yet to prove it can do it — which makes the mega-P/E even less attractive in my eyes.

Pets at homePets at Home

The specialist retailer, which describes itself as “a paradise for pets and pet owners”, with over 380 stores across the UK, was floated at 245p in March. The shares are currently down 12% at 216p.

Pets at Home will be announcing its maiden full-year results on Thursday. Analyst earnings expectations give a P/E of 16, which is below the FTSE 250 average of pushing 20. There’s another positive in that the company’s earnings growth is forecast to be higher than the P/E — that’s to say, growth at a reasonable price — and a dividend just for good measure.


One of a number of Lloyds of London insurers in the FTSE 250, Brit was floated at 240p a share in April, and the price is little changed at 242p.

The company recently said: “The current market presents both challenges and opportunities”. Analysts appear to see more challenges than opportunities, because they’re forecasting falling earnings for at least the next two years, putting the company on a ‘value’ P/E of about 9, with a potentially massive 10% dividend yield. However, established stock-market rivals Amlin and Catlin are also trading on low P/Es and high yields.


The well-known discount retailer, which has well over 500 stores in the UK and Ireland, was floated at 300p in March. The shares are currently up 21% at 363p.

Poundland issued a year-end trading update last month, saying total sales have increased 13% to £998m, and that profits are expected to be in line with market expectations of £27m, implying a P/E of about 33. That doesn’t look too appetising against analysts’ forecast annual earnings growth in the low twenties for the next couple of years. Competition is hotting up in the discount sector and Poundland’s numbers give a wafer-thin profit margin of 2.7%.

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G A Chester does not own any shares mentioned in this article.