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Just Eat clinches nationwide delivery partnership with McDonald’s

Analysts at Liberum said the deal is likely to help the takeaway app subdue competition from its rival Uber Eats, which also has a deal to deliver McDonald's

Just Eat PLC - Just Eat clinches nationwide delivery partnership with McDonald’s Corp

Just Eat PLC (LON:JE.) has inked a partnership with fast food giant McDonald’s Corp (NYSE:MCD) to become its second exclusive delivery partner for the UK and Ireland.

The partnership, to be implemented during 2020, follows the successful roll-out of Just Eat’s delivery capabilities in the UK, as well as similar partnerships with outlets such as bakery chain Greggs PLC (LON:GRG).

READ: Just Eat investors squeamish as CMA launches investigation into Takeaway.com merger

Peter Duffy, Just Eat’s interim chief executive, said while the partnership will require “significant investment”, it will also accelerate the group’s growth ambitions and “enhance” its market position by offering a wider choice to customers.

Accompanying the news was a brief trading update for the year ending 31 December, where Just Eat said the year had ended in line with its expectations and that it expects to report underlying earnings (EBITDA) for the period of around £200mln with revenues of £1bn.

UK order growth over the year totalled 8%, Just Eat said, adding that orders in its other markets during the fourth quarter had followed “similar trends” to those form the third quarter, with “good momentum” reported in Australia, Italy and Switzerland alongside “continued strong growth” in Canada.

“We are pleased to confirm [EBITDA] towards the top end and revenue broadly in line with the guidance range we provided at the start of 2019, notwithstanding the significant developments during the year", Duffy said.

In a note, analysts at Liberum, which rate Just Eat at ‘hold’ with a price target of 870p, said the deal will likely help the company “subdue” competition from rival Uber Eats, which had been using its own partnership with McDonald’s as a “key weapon” in its battle to gain market share.

Just Eat shares were up 0.3% at 858.2p in early trading on Tuesday.

Quick facts: Just Eat Takeaway.com NV

Price: 8866 GBX

LSE:JET
Market: LSE
Market Cap: £5.43 billion
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