Westlife Development Limited delivers strong Q4FY21

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 March 31, 2021. The results were taken on record by the Board of Directors at a meeting held today.

HIGHLIGHTS OF QUARTER ENDED MARCH 31, 2021

- Total revenue stood at ₹ 3575.9 million - a 6.3% growth over Q4FY20

- Restaurant Operating Margin touched a five year high of 16.4 % - a whopping 527 bps growth

- Operating EBIDTA jumped by 66% YOY at ₹ 324.5 million.

- Positive PAT at ₹ 21.0 million.

- Cash profits for the quarter stood at ₹ 321.5 million

- The company recorded highest ever McDelivery Sales in March 2021.

In the quarter under review, the company clocked revenues of ₹ 3575.9 million registering a 6.3% YoY growth. This is despite regulatory headwinds, lockdowns, curfews and capacity limitations witnessed across markets. It also reported a positive SSSG of 10.5%.

Sales were driven by an almost complete recovery in dine-in and an impressive 142% growth across the company's convenience channels. Revenues from McDelivery and Drive Thru saw a YoY growth of 26% and 81% respectively. Even after dine in opened across the market, the company did not see a slowing down in its "out of restaurant" consumption. The company recorded its highest ever McDelivery Sales in March 2021 and the sales through the on-the-go channel grew over three times in the last three quarters.

This strong sales acceleration was coupled with cost leadership that aided a 91-bps growth in Gross Margin on a YoY basis and landed at 66.5%. The company also grew its Restaurant Operating Margins by a whopping 527 bps that stood at a five-year high of 16.4%. Fixed cost reduction coupled with a judicious control resulted in a significant improvement in the company's Operating EBITDA. It stood at ₹ 324.5 million for the quarter, up from ₹ 195.8 million same quarter last year - a strong jump of 65.7%.

All the above resulted in a net profit of ₹ 21.0 million as compared to a loss of ₹ 166.5 million in the same quarter last year. The company's cash profit for the quarter stood at ₹ 321.5 million.

The strong momentum over the last two quarters helped the company wipe away 100% losses of 1st half. The company exited the year with a positive cash flow and a strong net debt position that puts the company in strong stead to navigate uncertainties and challenges that lie ahead.

Commenting on the financial results for the quarter ended March 31, 2021, Mr. Amit Jatia, Vice-Chairman of Westlife Development Limited, said, "We are pleased to be closing FY21 on a strong note with a robust business recovery. It was a challenging but inspiring year that gave us a chance to consolidate our strengths and create new competitive advantages. We did some exemplary work on the cost leadership front and strengthened our omni-channel strategy. We believe we are stronger than ever and have all the arms in our arsenal to confidently navigate in this Volatile Uncertain Complex and Ambiguous world."

Safety and convenience continued to be the key tenets of strategy for Westlife Development in Q4FY21. The company continued to tap into key occasions to keep the customers engaged and excited. After a COVID induced blip in 2020, the company also got back on track with its expansion plan, much in line with its vision 2022 commitment. It opened a new flagship restaurant this quarter at the departure terminal of T2 international airport in Mumbai, that trended very well through the quarter.

Reinforcing its commitment towards the well-being if its employees, Westlife Development recently announced that it will facilitate and pay for the vaccination its 10,000 employees. The company has already completed the vaccination drive for its employees in the age group of 45 years and above.

Despite the lurking challenges of the pandemic, the company has entered the new-year with a good momentum and a balance sheet that puts it in a strong position in the QSR industry. It is watching the developments with regard to the second wave closely. With a strong omni-channel strategy and constant rising brand trust, it is confident of navigating the challenges effectively.

Shares of WESTLIFE DEVELOPMENT LTD. was last trading in BSE at Rs.418.5 as compared to the previous close of Rs. 426.1. The total number of shares traded during the day was 6680 in over 373 trades.

The stock hit an intraday high of Rs. 431.95 and intraday low of 418.5. The net turnover during the day was Rs. 2836115.

Source : Equity Bulls

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