- MTY Food Group (TSX:MTY) has reported a 41 per cent increase in revenue for the quarter ending February 29, 2020
- Total revenue came to C$150.8 million this year, compared to $107.3 million for the same period in 2019
- Systems sales experienced a similar increase, up from $687.8 million last year to $999.5 million this year
- MTY has attributed these improvements largely to the performance of various acquisitions
- MTY Food Group (MTY) is currently down 2.95 per cent to $23.34 per share, with a market cap of $580.94 million
MTY Food Group (TSX:MTY) has reported a 41 per cent increase in revenue for the quarter ending February 29, 2020.
At the end of the quarter, the restaurant franchisor and operator had a network of 7,300 locations. Of these, 173 were corporate-based, 7,140 were franchised and 23 were held under joint ventures.
Geographically, 54 per cent of these locations are in the United States, with 39 per cent in Canada and the remaining 7 per cent found internationally.
Total revenue for the quarter came to C$150.8 million this year, compared to $107.3 million for the same period in 2019. Similarly, total systems sales reported a 45 per cent increase, from $687.8 million last year to $999.5 million this year.
MTY attributed this largely to the performance of acquisitions that were made in the interim, specifically the company’s takeover of Papa Murphy’s. That said, organic growth in systems sales also increased by $11.4 million for the quarter.
As of February 29, MTY had $56.8 million in cash-on-hand, and long-term debt of $561.7 million in the form of holdbacks on acquisition and bank facilities.
However, the impact of COVID-19 did not peak until early March and, as a result, the full effects of the pandemic on MTY are not yet known.
Eric Lefebvre, CEO of MTY Food Group, acknowledged this in today’s announcement, and said that the next two quarters are likely to take some kind of a hit.
“In March, we took proactive steps to ensure the well-being and safety of our employees, franchisees and customers and the continuity of our operations and businesses.
“We implemented temporary cost and cash spending reduction measures and are working closely with our various stakeholders to limit the impact on the company’s liquidity,” he said.
These initiatives are likely to take some time to reach full effectiveness, and MTY is therefore expecting to burn roughly $10 million in cash during the second quarter of the year.
Looking forward, MTY says that its primary focus is to re-open its temporarily closed restaurants by rebuilding customer confidence through the implementation of proper safety measures.
“Our strategy for the long-term remains intact as we believe our strong brands will be able to regain the positive momentum we saw in the first quarter,” Eric concluded.
MTY Food Group (MTY) is currently down 2.95 per cent to $23.34 per share at 3:40pm EDT.
