Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Just Eat Takeaway
There was a media report earlier in the week suggesting that social distancing – and the absence of dealmakers ‘doing lunch’ – had taken a toll on the M&A market. That certainly doesn’t seem to be the case with Just Eat Takeaway [LON:JET] confirming in an RNS this morning that it wants to merge with US peer GrubHub. The $7.3 billion, all-share deal would see GrubHub’s investors taking a 30% stake in the combined entity, which would be the largest food delivery service in the world outside of China. The transaction remains subject to approval from shareholders in both companies and could well attract the interest of competition regulators, too.
Johnson Matthey [LON:JMAT], the chemicals and technology specialist, has published full year results this morning. The company made good progress with revenues up by more than a third, although the COVID-19 pandemic took a toll on numbers, reducing underlying operating profits by around £60m, resulting in a year-on-year decline for the metric. Given the current uncertainty, the company is unable to provide any guidance but notes that a dividend will be paid and that neither the CCFF nor the government furlough scheme have been used. However in a bid to accelerate the company’s cost saving program, job losses will be incurred with some 2,500 redundancies expected over the next three years.
Full year numbers from telecoms company TalkTalk [LON:TALK] have shown a slight decline in revenues, but profits have moved significantly higher. This is quite a long report, but a few highlights include a 20% increase in network usage since the lockdown began and the company making bad debt provisions of £15m for the year ahead, given the challenging macroeconomic environment. Customer churn remains at 1.2% per month, in line with the figures seen in the previous year and the company notes that neither the CCFF nor the furlough scheme have been tapped. With this in mind, an unchanged dividend of 2.5p for the full year will be paid.
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