STRONG KFC SALES BUCK UP COLLINS FOODS' PROFIT

COLLINS Foods (ASX:CKF) has bounced back in the black, after strong sales across its KFC stores delivered net profit of $14.3 million in the first half.

The food retailer posted a 33.6 per cent lift in profit in the six months ending October 18, compared to a loss of $22.9 million in the previous period.

Revenue lifted 5.1 per cent to $269.7 million in HY16, with EBITDA also up 19.8 per cent at $35.3 million.

The company's renewed focus on its KFC network is paying off, after scaling back Sizzler to a non-core business segment earlier this year.

Three new KFC restaurants opened in the first half, with two locations breaking ground in Western Australia. Another 16 stores have been remodelled to attract customers.

The Sizzler Australia business remains EBITDA positive, following the closure of three restaurants.

Collins Foods CEO Graham Maxwell says the top line growth and solid balance sheet puts the company in a strong position heading into the new year.

"We are very pleased with the overall performance of the Collins Foods business, particularly the ongoing strength of our KFC businesses in both Queensland and Western Australia Northern Territory," Maxwell says.

"They have achieved strong same store sales growth and continue to deliver improved margins resulting from our ongoing focus on operational performance.

"We continue to develop our network of KFC restaurants within the territories that we operate while at the same time investing in our existing restaurants to keep the look and feel contemporary and enticing for our customers."

Collins Foods' newest venture Snag Stand opened a new location on the Gold Coast, taking the total to five company-owned stores and one franchised. Two Snag Stands in Melbourne which didn't reflect 'future brand positioning' have been closed.

"Our focus remains on our three key objectives maximising operational performance, developing a solid growth platform and building further strength and resilience within the business," Maxwell says.

"We will continue to grow by providing excellent customer service, great products that our customers love, building new restaurants and remodelling selected existing restaurants."

The board has declared an interim dividend of 6 cents per share to be paid on December 23, up 20 per cent on the previous period.