Trent Limited announces Q4FY21 results

Trent Limited (the "Company"), today announced its financial results for the fourth quarter and the financial year ended March 31st, 2021 (standalone and consolidated).

Standalone Results

- During the initial months of the quarter, the pandemic related restrictions had eased considerably aiding sentiment and improving consumer traction. In this backdrop, revenue from operations recovered to Rs. 774crs showing 7% growth over both Q3 FY21 and the corresponding previous quarter. This coupled with various cost mitigation measures, including with respect to property related payouts and operating expenditures, led to Profit from operations1 registering encouraging growth. However, the recovery has been impacted by the lockdown / trade restrictions announced by States starting mid-March.

- In Q4, we continued with the initiative of crystallizing reductions in rent and related charges. As required by the applicable standards, Rs 12crs in Q4 and Rs. 89cr in the year have been accounted as part of other income notwithstanding their operating nature. We continue to engage with our property partners as we navigate the recent business disruptions in several States.

- We have also pursued the agenda of making certain of the expenditure vary more directly with the revenues. This initiative, including with respect to lease payments, mitigates downside risk to an extent. The reported results incorporate the IndAS 116 lease accounting requirements reflected across rent, depreciation, other income and finance costs in the statement of profit and loss. The net effect of Ind AS 116 on the standalone profit before tax was an adverse impact of Rs. 35crs in FY21. Other income primarily includes rent waivers, investment & dividend income / fair value changes and recognition of Ind AS 116 impact of lease modification / termination.

- Westside revenues in Q4 were broadly at last year levels (96% of the corresponding quarter on a like for like basis). However, we have seen a sharp drop in the revenues following the temporary partial lockdowns in various States along with the local restrictions of operating hours / days starting mid-March.

- Our customers continue to increasingly leverage the convenience of our digital platforms with the online channel registering over 150% growth in Q4. For the first time, over 5% of Westside revenues were recorded through online channels in Q4 as well as in the financial year. Digital content and social media initiatives are increasingly central to our ongoing communication of the customer offer. The synchronization of these efforts with product launches each week has improved engagement across our target audience.

- WestStyleClub - our refreshed loyalty program launched in December 2020, has seen significant traction. Notwithstanding the covid impacted footfalls, the program registered the highest ever paid enrolments during any financial year. Also, given the attractive membership benefits, the average bill values registered encouraging growth. As of 31st March, we have over 6 million members in the Westside loyalty program.

- Also, we remain focused and committed to the accelerated store expansion agenda. As of 31st March, we have 174 Westside and 133 Zudio stores in the portfolio. Further, an additional 19 Westside and 15 Zudio stores were fitted out and ready to open. These 34 stores would open once covid related restrictions are eased / approvals are in place. Together with the fitted-out locations, in FY21, the portfolio of fashion stores expanded by over 80 stores.

Consolidated Results

- For Q4, the consolidated revenues of Rs. 906crs was a growth of 7% over the corresponding previous period. Profit after tax as attributable to the equity shareholders of the company was Rs. 29crs vis-à-vis Rs. 13crs in Q4 FY20.

- The consolidated results also incorporate the Ind AS 116 lease accounting requirements. The net effect of Ind AS 116 on the reported profit before tax for the year was an adverse impact of Rs. 40crs.

Speaking on the performance, Mr. Noel N Tata, Chairman, Trent Limited said, "As I look back at the last financial year, we are very encouraged by the consistent & strong recovery of demand for our concepts in many markets across the country, when the pandemic related restrictions eased. We continued to emphasize our expansion program and I am happy to report that we have over 300 fashion stores in our portfolio and a significant number of additional locations fitted-out & ready to open.

While we cannot predict how quickly we will see the back of this crisis, we know that it will get behind us, especially given the substantial vaccination program. And when it does abate, customer demand should rebound strongly possibly starting in the 2nd quarter. We are confident that the business has the expertise and importantly the resilience to weather this crisis.

We are cautiously optimistic on the medium-term outlook. Near term uncertainties notwithstanding, we are continuing to focus on building out differentiated brands and strong expansion of our reach through stores and digital platforms."

Shares of TRENT LTD. was last trading in BSE at Rs.777.15 as compared to the previous close of Rs. 776.3. The total number of shares traded during the day was 24409 in over 1584 trades.

The stock hit an intraday high of Rs. 790.2 and intraday low of 761.35. The net turnover during the day was Rs. 18901530.

1 excluding exceptional items, non-operating income, finance costs, tax and IndAS 116 impact

Source : Equity Bulls

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