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Mon 25th Nov 2019 - Update: Wagamama, Just Eat, Admiral Taverns
Wagamama reports like-for-like sales up 6.3% in Q2 – hits £1m of delivery sales in a single week for the first time: Wagamama has reported turnover increased 11% to £93.5 million in Quarter Two 2019 with the continued expansion of its restaurants in the UK (six new restaurants and one delivery kitchen opening in the quarter). There was 6.3% UK like-for-like sales growth and 12.5% US like-for-like sales growth. Adjusted Ebitda was up 27.2% in Q2 2019 to £16.7 million from £13.2 million in Q2 2018/19 (13 weeks). The company reported its first £1m week of delivery sales in Quarter Two – and 36 restaurants achieved record sales weeks with a number of sites achieving multiple records. Wagamama reported that it had now traded ahead of the market every week for 287 weeks. The company also reported that team turnover had dropped to its lowest level – 58%. Chief executive Emma Woods said: “Great businesses are built from dedicated people, a commitment to always be on the side of their customers and a galvanising sense of purpose. Wagamama has always followed this model, and I am thrilled to say has delivered another quarter of strong outperformance versus the market with a number of record restaurant sales weeks. We look forward to 2020, and whilst we don’t expect to be immune to the various headwinds facing our industry, we will stay true to our positive culture and growth mindset.”

Just Eat tells shareholders that 720p Prosus offer undervalues the company: The board of Just Eat has written to shareholders to explain why the 710p a share cash offer from Prosus undervalues the company. The letter states: “710 pence represents an implied premium and multiple of revenue well below market benchmarks. The Prosus Offer of 710 pence per share is 20% lower than Just Eat’s all-time high share price of 890 pence and 13% lower than the highest share price over the last six months of 812 pence. Furthermore, the premium that Prosus is offering to Just Eat’s share price before the announcement of the Takeaway.com Combination is just 12%. By comparison, cash offers for FTSE 350 UK public companies since 2016 have on average been at a significantly higher premium. Prosus is only offering 4.8x Just Eat’s 2019 revenue. This is significantly lower than the average multiples of comparable transactions in the online food delivery sector, most notably the multiple that Naspers, who are a 74% shareholder in Prosus, paid for its investment in Delivery Hero, in September 2017. Just Eat has leading market positions in a rapidly expanding sector with massive headroom. Your company today operates in a massive and growing addressable market estimated to be worth up to £476 billion in 2019, with ongoing material structural growth underpinned by increasing penetration of online food delivery and restaurant availability. We are the market leader for online food delivery in eight of our thirteen markets, with a market share of more than double our nearest competitor in our largest, most attractive markets in the UK, Canada and Brazil. Our industry is young and its growth potential is enormous. With further investment, our hard won market positions will deliver significant upside to you over the long term.” Jitse Groen, chief executive of Takeaway.com, which is proposing a merger with Just Eat, stated: “This merger combines the two most profitable European food delivery websites: Just Eat in the UK and Takeaway.com in the Netherlands. We believe it is realistic to expect that Germany, which is already more than double the size of our Netherlands’ business, will over time trend towards the Dutch Ebitda margin. The strong cash generating capability of these profit pools will continue to fuel the growth of the combination. Our team has a proven ability to win in competitive markets and has defeated numerous competitors in many countries, whether large scale tech giants or well-funded, own-delivery challengers. We remain strongly committed to the merger.”

Admiral Taverns completes acquisition of 137-strong Marston’s pub package: Admiral Taverns has completed the acquisition of 137 pubs from Marston’s. The nationwide portfolio is comprised of a mixture of predominately tenanted, leased and retail-agreement sites across England and Wales. Chris Jowsey, chief executive of Admiral Taverns, said: “On behalf of the entire team here at Admiral I am delighted to be able to officially welcome our new licensees and colleagues into the business. We are firm champions of the leased and tenanted model and through this latest acquisition have been able to acquire an excellent portfolio of pubs, for which we are confident we can unlock new growth opportunities through our award-winning and highly supportive approach. Our integration programme is well underway, and we look forward to developing these new working partnerships.” Backed by investors Proprium Capital Partners and C&C Group, the last year has seen Admiral accelerate its growth strategy to expand its estate of community pubs, most recently acquiring 150 pubs from Star Pubs & Bars in October 2019. Admiral has consistently championed the merits of the supported-tied agreement and remains focussed on developing its estate through this model.

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