Just Eat Takeaway.com NV

Just Eat Takeaway.com NV (LON: JET) is an online food delivery operator in marketplace engaged in the business of connecting restaurants and consumers and allowing them to order food from neighbouring restaurants with a home delivery facility. The group has operations in Vietnam, Israel, Germany, Romania, Bulgaria, Poland, the Netherlands, Switzerland, Portugal, Austria, Belgium and Luxembourg.

Recent News
On 7^th April 2020, Just Eat Takeaway.com announced the issuance of 121 shares, pursuant as a part of share and option plans for employees. The group has issued shares in Just Eat Takeaway.com at €0.04 nominal value per share.

Financial Highlights – Financial Year 2019 (31^st December 2019, EUR, million)
For the financial year ending 31^st December 2019,the orders in FY2019 increased by 70 per cent to 159.2 million. The gross revenue went up by 78 per cent to EUR 426.8 million in FY2019 from EUR 240 million in FY2018. The revenue increased by 79 per cent to EUR 415.9 million in FY2019 from EUR 232.3 million in FY2018. Driven by efficiency in marketing, the Takeaway.com represented adjusted EBITDA of EUR 12.3 million in the financial year 2019. The loss for the period stood at EUR 115.5 million in the financial year 2019 versus a loss for the period of EUR 14 million in FY2018. The loss was due to transaction and integration expenses and amortisation expenses for the period.

Share Price Performance

Daily Chart as of April14^th, 2020, after the market close (Source: Thomson Reuters)

Just Eat Takeaway.com NV shares closed at GBX 7,854 at the time of writing after the market close on 14^th April 2020. Stock's 52 weeks High is GBX 8,330.00 and Low is GBX 5,345.00.

Key Risks
Fluctuations in the commodity and foreign currency rates can increase input costs which the group may not be able to pass on to the consumers. The prevailing uncertainty had made it difficult for the company to predict the outcome of investments made.

Conclusion
Takeaway.com shown a decline in financial performance in the financial year 2019. Although the revenue has improved, while the bottom-line performance has declined for the period. The group witnessed an increase in the expenses related to amortisation expenses and transaction and integration expenses for the period. The group showed decent growth from it’s the Netherlands, German and other Leading Markets for the period. In the short run, the business operations can be impacted by Covid-19 contagion due to ongoing curfew and lockdown state. However, coronavirus has not impacted the Group materially, and the Company has been maintaining strong liquidity to manage any unforeseen financial shock.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 7,854 (as on 14^th April 2020), while we look for any upcoming catalysts in the near term.
 

Watches of Switzerland Group Plc

Watches of Switzerland Group Plc (LON: WOSG) is a personal goods company based out of the UK engaged in the business of retailing of watches. The group also offers classic watches, fashion watches, jewellery watches and after-sales services to the customers. The group operates through its own stores, Mayors and Goldsmiths stores and Mappin and Webb stores.

Covid-19 Update
On 23^rd March 2020, Watches of Switzerland Group released an update related to the impact of coronavirus outbreak on the business performance. The group’s revenue for 7 weeks period ending 15^th March 2020 was ahead of forecasts and increased by 16.8 per cent versus last year data for the same period. The revenue on LFL (Like-for-Like) bases surged by 12 per cent versus last year data for the same period. Due to the outbreak of Covid-19, the company witnessed the adverse impact on its travel and tourism business, and the stores located within the London airport and Las Vegas airport witnessed a decline in the trading for the period. The group through increased sales to domestic customers in the UK and the US markets were able to offset the impact of poor trading from travel and tourism business. With the increase in the measures taken by the governments to contain the virus, the group closed stores across the US and the UK markets. The group expect its revenue to be in between GBP 809 million to GBP 812 million for the year to 26^th April 2020. The company has taken required steps to reduce its optional expenses, cut working capital and delay capital projects. The government measures such as tax payment deferrals, employee cost support and business rates suspension will act as positive measures for cash planning. The group expect its online operations will work as normal in challenging times. The group has a strong balance sheet with adequate liquidity which will help the company to tackle the uncertain times.

Share Price Performance

Daily Chart as of April14^th, 2020, after the market close (Source: Thomson Reuters)

Watches of Switzerland Group Plc shares closed at GBX 232 at the time of writing after the market close on 14^th April 2020. Stock's 52 weeks High is GBX 397.00 and Low is GBX 170.80.

Valuation Methodology

*Peers: Frasers Group plc, Angling Direct Plc, Cambria Automobiles Plc and Card Factory Plc.

Key Risks
Changes to economic conditions could lead to a reduction in demand for housing which could impact the company’s revenue.  Any change in the spending pattern of customers might hamper the financial performance of the company. The launching of new operations might increase the regulatory risks for the company.

Conclusion
The group has been performing well before the outbreak of Covid-19. The group has able to increase sales from both the UK and the US markets in an uncertain period. With the travel restrictions imposed on travelling, the group witnessed a decline in the trading from travel and tourism business. The company expectthe financial performance to reflect the historic issues inherited with uncertain market conditions in the financial year 2020. The outbreak of COVID-19 has impacted the business performance of the company due to closures of its stores.

Based on the headwinds faced by the group, we have given a "WATCH" recommendation at the closing price of GBX 232 (as on 14^th April 2020), while we look for any upcoming catalysts in the near term.
 
 
*All forecasted figures and peers have been taken from Thomson Reuters.

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