Westlife Foodworld (505533) Q4 15/16 earnings summary

Executive summary

• FY16 delivered a turnaround to positive comparable sales of 1.8%, following -5.9% in FY15; Q4 comparable sales reached 8.4%, the highest in 13 quarters.

• Revenue grew 9.0% on a normalized basis to ₹8,334.3m; profit after tax was ₹28.3m versus a ₹291.1m loss in FY15.

• Growth and margin gains reflected menu innovation, McCafé and McDelivery expansion, and restaurant cost efficiencies amid weak consumer demand.

Financial highlights

• Reported revenue rose 12.1% to ₹8,568.3m; normalized revenue was ₹8,334.3m, excluding the ₹234.0m indirect-tax credit relating to prior periods.

• Profit after tax was ₹28.3m versus a ₹291.1m loss; cash profit was ₹671.8m versus ₹253.9m in FY15.

• Adjusted operating EBITDA was ₹487.7m versus ₹204.6m; adjusted margin was 5.9% versus 2.6%.

• Added 30 restaurants to reach 236; McCafé locations rose to 75, including 38 additions during FY16.

Outlook and guidance

• Targeting 450–500 restaurants by 2022 across western and southern India; FY16 ended at 236 locations.

• McCafé planned to expand to 110–130 locations in FY17; the stated ambition was to double the 75-location base within 12–18 months.

• Priorities include breakfast growth, healthier menu options, improved digital ordering and delivery, and continued customer-experience investment.