Westlife Development Q2 profit nearly doubles to Rs2.07 crore
Mumbai: Westlife Development Ltd, which operates McDonald’s restaurants in western and southern India, Monday said its net profit in the September quarter rose 190.1% from a year ago to Rs2.07 crore on higher same store sales.
The company posted a 12.8% year-on-year growth in total revenues to Rs264.67 crore as same store sales growth (SSSG) stood at 8.4% for the quarter. SSSG stands for sales coming from stores open for the same period of time, excluding sales from new stores.
“We’ve had some really good results; our same store sales growth has come in at 8.4% which is on top of the 6.5% we had last year in the same quarter,” Amit Jatia, vice chairman, said at a press briefing. “This shows that the foundation for our business is building with the consumer and it shows that these are sustainable efforts that have led to the results.”
WDL now operates 265 restaurants and 130 McCafes - the company’s chain of coffee outlets located inside McDonald’s restaurants. The company continued to open 25-30 new restaurants a year, along with 40-50 new McCafes a year, Jatia said.
“Eventually, we want a McCafe in every restaurant,” he said.
Westlife Development now also has 8-10 Experience of the Future (EOTF) restaurants in Mumbai and Bengaluru. This format offers table service, digital kiosks to order food, and mobile charging outlets, among other features, Mint reported on 10 March.
“It’s been less than a year, and we want a year to go by,” Jatia said on plans to expand the format. “Already, we can see there’s a doubling to tripling in the next 2-3 years. The idea is to make more and more of our restaurants EOTF.”
The company is planning to improve its cash flow to fund investments, Jatia said. WDL’s cash profit was up 44.3% to Rs2.078 crore. “We feel we will fund our expansion using our cash flows,” Jatia said, adding the company has Rs5-10 crore cash in hand and will not raise additional funds for expansion.
“One should look at their ROM (restaurant operating margins which has improved by over 200 bps (basis points, or 2%) which we haven’t seen in a long time, and their launches have been pretty good both in McCafe and main menu,” said an analyst with an equities brokerage tracking the scrip, requesting anonymity. “Even compared to peers including Jubilant Foodworks (operators of pizza chain Domino’s), Westlife had more festive season launches. I expect Q3 for the company to be a lot better.”
Westlife Development shares closed at Rs263.05 on the BSE on Monday, up 4.97% from their previous close, while the benchmark Sensex index closed 0.14% higher.
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