Westlife Development Limited delivers strong Q2FY22

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

Highlights of Q2FY22

• Total revenue for the quarter stood at % 3,854.2 million - a 84% growth over Q2FY21
• Same Store Sales Growth stood at 84%
• Restaurant Operating Margin grew 203.5% YoY, stood at = 670.9 million
• Operating EBIDTA in Q2 jumped by 994%YoY taking it to = 457.4 million
• Cash profit for the quarter stood at 262.3 million
• The company opened 5 new McDonald's restaurants and 6 McCafés this quarter
• The company launched two new immunity boosting beverages on the McCafé Menu - Turmeric Latte and Masala Kadak Chai

All numbers include the impact of IND AS 116

In the quarter under review, the Company's revenues surged by a robust 84% YoY to % 3,854.2 million, with the Same Store Sales Growth also at a solid 84% YoY.

This growth has been driven by both - the Company's convenience channels that continued to accelerate and dine-in that built up strong and fast. Convenience channels that include delivery, take-out, drivethru and on-the-go grew by a robust 77% over last year. This is in spite of a strong recovery in dine-in revenues, which almost doubled over same quarter last year.

This reinforces the fact that with its pivot to being an omni-channel brand, the Company has acquired new customers and created new use-cases. This is driving incremental revenues without any business cannibalization.

September 2021 - when most restrictions were eased - saw a 103% recovery vis-a-vis September 2019 which was pre covid. The Company saw complete recovery across all its markets despite continued restrictions on time and capacity in some key cities. Its delivery sales grew 50% over September 2019 - again a testimony to the strong convenience channel that the Company has built over the last 18 months.

The Company continued to hold strong on its margin performance, despite all inflationary pressures. Its Gross Margins surged by 87.5% YoY while Restaurant Operating Margins jumped by a robust 204%. As a result, its Operating EBITDA surged 11 times YoY to Rs 457.4 million.

Earlier this month, Westlife Development announced that it will be investing INR 800-1000 crores in the business over the next 3-5 years. It aims to double its footprint, reimage all restaurants to EOTF, further strengthen its technology prowess and drive cutting edge menu innovation.

Commenting on the financial results for the quarter ended September 30, 2021, Mr. Amit Jatia, ViceChairman of Westlife Development Limited, said, "With this strong performance, I believe, a newer and stronger normal has emerged for us. We will continue to make bold moves to reinforce our market leadership. In the coming months, we will pick up the pace on store expansion, adding close to 30-35 new stores in our core and emerging markets, thus increasing our penetration. While this will help grow our topline, an upward trending AUV, aided by burger leadership, chicken leadership and McCafe will help us both enhance both topline and profitability."

Menu innovation, omni-channel acceleration and network expansion remain the cornerstones of Westlife Development's growth strategy. The Company has been adding new, clutter-breaking products and is the only QSR to have relevant offerings across all day-parts - including breakfast, snacks, coffee, lunch, dinner and desserts. More recently, the Company has introduced McSpicy Fried Chicken in the South market that has received phenomenal response from the customers. This quarter, it also introduced two new immunity boosting beverages - Turmeric Latte and Masala Kadak Chai - to its McCafé portfolio. It also added new products to its exclusive McBreakfast menu. The Company's all day-part menu gives it a unique competitive advantage in terms of AUV, which has been a key strength for brand McDonald's globally as well.

The Company has also taken a future forward view on its digital investments and traversed a strong journey to being a food tech company. It has pivoted to being a truly omni-channel, convenient, digitally driven brand that is aiding revenue optimization.

During the quarter, Westlife added 5 new McDonald's restaurants taking the total count to 310. It also added 6 McCafés and 8 new Experience of the Future (EoTF) restaurants, aimed at elevating the customer experience. The company has put all the building blocks in place for the future and is confident of sustaining business momentum.

Shares of Westlife Development Ltd was last trading in BSE at Rs. 573.15 as compared to the previous close of Rs. 562.65. The total number of shares traded during the day was 8361 in over 812 trades.

The stock hit an intraday high of Rs. 585.00 and intraday low of 560.50. The net turnover during the day was Rs. 4778701.00.

Source : Equity Bulls

Keywords

WestlifeDevelopment INE274F01020 Q2FY22 ResultUpdate