KFC COOKS UP STRONG RESULTS FOR COLLINS FOODS
Written on the 30 November 2016
COLLINS Foods' (ASX:CKF) half-year profits have sizzled after adding more than 20 KFC stores to its network across Australia and market entry into Europe.
The Brisbane-based food service operator recorded a 17.2 per cent lift in net profit to $16.8 million for the half-year ending October 16.
Revenue was up 4.7 per cent to $282.5 million compared to a year earlier, while underlying EBITDA improved 9.4 per cent to $38.6 million.
Collins Foods CEO Graham Maxwell says KFC continued to be a strong performer for the group.
"Given our focus on operational performance, the KFC businesses have achieved similar margins to prior year even though same store sales growth was marginally down on the prior year," Maxwell says.
"In addition to the organic growth in earnings that we have been delivering, we have also grown our KFC businesses through strategic, value accretive acquisitions.
"During the half we completed the purchase of 13 KFC restaurants around the NSW/Victoria border. These restaurants are performing well and we see further opportunities for growth in Australia.
"We also recently announced the acquisition of 11 KFC restaurants in Germany, providing Collins Foods with international growth opportunities in an attractive under-penetrated market, and expect to complete this acquisition in early December."
Collins Foods opened one new restaurant in Queensland during the first half, with another five or six restaurants set to open in the remainder of FY17. The company also remodelled 13 stores in its network, with plans for seven more store renovations.
The company's network of 21 Sizzler stores posted a 27.3 per cent increase in EBITDA of $2.7 million in the first half, while Sizzler Asia also delivered earnings growth.
Maxwell says the company will continue to focus on top line growth, operational performance and business resilience.
"With a strong balance sheet and proven capabilities running KFC restaurants, we will continue to pursue further acquisition opportunities as they arise, while also continuing to grow and refurbish our existing portfolio of restaurants," he says.
Collins Foods will pay an interim dividend of 8c per share on December 15.