- Avast receives takeover confirmation
- Energy companies react to Ofgem price controls
- Deliveroo delivers strong results
Avast receives confirmation of takeover offer
Cyber security giant NortonLifeLock has reached a takeover agreement with its British peer Avast - shareholders will receive a combination of cash and newly-issued shares in Norton which value the company at £6.2bn.
That is equivalent to roughly a 20 per cent premium to the share price on the day before the offer was first mooted in July and investors should take comfort that they will retain a slice of Avast’s growth opportunities via their stake in Norton. But with yet another UK company setting sail for foreign ownership, British investors are justified in bemoaning the lack of domestic tech opportunities.
Energy companies react to CMA’s assessment of Ofgem’s price controls
When Ofgem published its RIIO-T2 price controls in December last year, energy companies reacted angrily. The change in the limit on how much energy companies could charge their customers would have a severe impact on return on investment, thus impacting future energy projects, they argued to the competition and markets authority.
The CMA has this morning published its provisional response to the energy companies and found favour in their argument that an ‘outperformance wedge’ - used to discount the headline cost of equity - would be detrimental. But National Grid and SSE have expressed disappointment that the CMA has not upheld its complaint about Ofgem’s calculation of the cost of equity.
Demand for deliveries doesn’t mean profits at Deliveroo
Perhaps it is the shocking turquoise of the jackets and freezer bags, or the fact that most of their riders operate on bikes, hopping on and off the payment as the mood takes them, but Deliveroo’s takeaway services seem to be dominating in the towns and cities that the company operates in.
Financial results certainly support that anecdotal evidence. In the six months to June 2021, Deliveroo reported a 100 per cent increase in orders on the previous first half, sending revenue up 92 per cent to £922m. Restaurants may be open, but that hasn’t stopped consumers appetite for a takeaway.
But strong demand and a surge in revenue still hasn’t helped the company turn a profit. Keeping the company and its riders in service is incredibly expensive, meaning gross margins fell to just 7.8 per cent in the first half of 2021. Add the £290m costs of marketing and the company delivered yet another operating loss.