Partnership between Greggs Plc and Just Eat Plc to effect a strategic leap for both

         

News Update – There has been news in several British business publications on 15 January 2020 that Greggs Plc has chosen Just Eat Plc to be the exclusive delivery partner for its products in United Kingdom. The company which saw tremendous success in 2019 on account of a new product launch called vegan sausage rolls has been in news for the payment of £7 million in bonuses to its employees. In an effort to capitalize on this success to further expand its revenue base, the company will be leveraging Just Eat Plc’s extensive reach in online food delivery services to build new markets. Just eat Plc on its part will also benefit immensely from this deal, as it makes them the exclusive food delivery partner of Greggs Plc.

Greggs Plc (LON: GRG) is a United Kingdom domiciled food producing and retailing company, that operates through a network of 2050 stores spread across United Kingdom. Headquartered in Newcastle,  the company sells freshly prepared food and beverages at highly competitive prices using a business model called  “Food-on-the-go” . The company has a wide menu that includes food items such as Breakfast, sandwiches, Pasta, Salads and Soups, Drinks and Snacks, Bakes, Sweet Treats, Platters as well as Hot-to- go food which focuses on healthy eating and makes sure that all their products have adequate and necessary nutrition, while not compromising on the taste. The company is also developing its online ordering, delivery and late-night takeaway business, to run side by side to its traditional business. The company’s stores are  located near motorway service stations and petrol forecourts operating around various travel hubs and roadside locations around the country.

On 8 January 2020 the company came out with its annual results statement for the year ending on 28 December 2019. In the statement the company made the announcement that the total sales had increased by 13.5 per cent, as compared to the growth of total sales in 2018 at just 7.2 per cent. Riding on this feat achieved by the company it also made a special announcement on that day of a bonus payment of £7 million to all its employees, which will be paid at the end of January 2020. The year 2019 has been  excellent for Greggs Plc from both an operational and financial point of view.

Just Eat Plc (LON: JE.) is a United Kingdom domiciled consumer services company based in London, with operations across United Kingdom and twelve other countries including the likes of New Zealand, Australia, Benelux, Canada, Denmark, France, Ireland, Norway and Switzerland as well as Italy, Mexico and Spain. The company acts as an online marketplace for food delivery, by partnering with various food businesses, restaurants, cafes and cloud kitchens to deliver food to its customers within the comfort of their homes or any other place across the countries it runs in operations in. The company allows the customers to place food orders from the restaurants in the region, through its online website or app, which are based on the company’s proprietary technology. This app then assigns the nearest delivery chauffeur to the customer, who picks up the order from the restaurant and delivers it to the customer in the quickest time possible. The company currently has more than 28 million active customers on its platform across thirteen countries.

In the recent past the company has been the focal point of intense M&A activity. The company is about to enter into a scheme of merger and acquisition with takeaway.com which would create the world’s largest online food take-away company.

Performance of Greggs Plc on London Stock Exchange

Source – Thomson Reuters

On 17 January 2020 at the time of writing of this report the company’s shares on the London Stock Exchange were trading at GBX 2,426.00.

The shares of the company during the past 52 weeks of trading at the London Stock Exchange have registered a 52-week high of GBX 2,550.00 while also registering a 52-week low of GBX 1,478.00. The company has a market capitalisation of £2.43 billion on the London Stock Exchange at the time of writing this report on 17 January 2020.

The stock’s traded volume at the above date and time stood at 122,059. Stock’s average traded volume for 5 days was 312,857.60; 30 days- 332,963.80 and 90 days – 387,960.83. The beta of the stock of the company on the date was 0.89, which compared to the benchmark index reflected a lower volatility. The stocks trading volumes on the London Stock Exchange on an average for 5 days was up by -6.04 % as compared to the 30 days’ average traded volume.  In last one month, the shares have generated a positive return of +7.49 % and also a return of +4.96 % return on year to date basis.

Performance of Just Eat Plc on London Stock Exchange

Source – Thomson Reuters

On 17 January 2020 at the time of writing of this report the company’s shares on the London Stock Exchange were trading at GBX 884.20.

The shares of the company during the past 52 weeks of trading at the London Stock Exchange have registered a 52-week high of GBX 912.20 while also registering a 52-week low of GBX 574.40. The company has a market capitalisation of £6.01 billion on the London Stock Exchange at the time of writing this report on 17 January 2020.

The stock’s traded volume at the above date and time stood at 795,515. Stock’s average traded volume for 5 days was 1,980,960.20; 30 days- 4,260,645.97 and 90 days – 3,071,904.33. The beta of the stock of the company on the date was 1.27, which compared to the benchmark index reflected a lower volatility. The stocks trading volumes on the London Stock Exchange on an average for 5 days was up by  -53.51 % as compared to the 30 days’ average traded volume.  In last one month, the shares have generated a positive return of +11.67 % and also a return of +5.68 % return on year to date basis.