Westlife Development Limited reports strong sales recovery in Q2FY21

Westlife Development Limited (BSE: 505533) ("WDL"), owner of Hardcastle Restaurants Pvt Ltd ("HRPL"), the Master Franchisee of McDonald's restaurants in West and South India, announced unaudited financial results for the quarter ended September 30, 2020. The results were taken on record by the Board of Directors at a meeting held today.

In the quarter under review, the company reported strong sales recovery led by its convenience channels that include delivery, take-out, drive-thru and on-the-go. Sales through these convenience channels zoomed back to their pre-COVID levels in September, while in-store started showing healthy recovery trend as the Government started unlocking markets in a phased manner. As a result, the company more than doubled its overall sales over Q1FY21, achieving close to 70% of pre-COVID levels. This was despite Maharashtra - the state that has close to 50% restaurants of the company - remaining shut for dine-in.

The company saw the pace of recovery across its operations accelerate, with recovery rate progressively increasing by 7-10% every month. Stores that were open for dine-in for more than five months came close to pre-COVID levels, with those that opened up recently recovering twice as fast.

The sales recovery was well-supported by the company's strong cost management. Westlife Development's focus on rationalizing costs and maximi,ing efficiencies across operations enabled it to bring down costs, even as the revenues increased. This helped improve margins and Operating EBITDA significantly with the company achieving break-even Operating EBIDTA in September 2020.

Commenting on the financial results for the quarter ended September 30, 2020, Mr. Amit Jatia, ViceChairman of Westlife Development Limited said "I am happy to share that we have effectively steered this crisis and have got the business on a strong recovery track this quarter. Our strong financial foundation combined with a focus on accelerating our omni-channel strategy is reaping great results for us. We look forward to the opportunities that lie ahead and are motivated by the recovery in business that we have seen in this quarter. I am confident that we will soon be back on our growth path."

Westlife Development's strategy for business revival has been focused on three key pillars of Assurance, Convenience and Access. With its 'Golden Guarantee' platform, it has made the McDonald's experience as safe as possible for both its customers and employees. The company's implementation of contactless operations, heightened sanitization across touch points and new hygiene protocols have helped build back customer confidence in a big way.

The company has also moved quickly to launch a bouquet of convenience services including contactless delivery, digitally-enabled contactless take-out and the innovative on-the-go service that has transformed all its restaurants into digital drive-thrus. These services have ensured that safe, hygienic and delicious McDonald's food is available for customers whenever, wherever and however they want.

Another key lever of strategy has been Access. Identifying the need to offer great value to the customers, Westlife Development has been giving its customers compelling combos and offers through its McDonald's and McDelivery app. This quarter, the company also tapped into key occasions such as World Chicken Day, Friendship Day and World Photography Day to enhance frequency and give customers more reasons to celebrate with McDonald's.

With customer confidence slowly building back buoyed by festive cheer and opening up of dine-in services in Maharashtra, the company is confident of accelerating the pace of recovery and marching towards achieving and exceeding pre-COVID level revenues.

Shares of WESTLIFE DEVELOPMENT LTD. was last trading in BSE at Rs.373.25 as compared to the previous close of Rs. 371.7. The total number of shares traded during the day was 3805 in over 453 trades.

The stock hit an intraday high of Rs. 385 and intraday low of 368.8. The net turnover during the day was Rs. 1436057.

Source : Equity Bulls

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