Collins Foods, the rise of KFC and the fall of Sizzler

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  • Collins foods posted full year revenue up 21.7% to $770.9 million.
  • Statutory net profit up 16.1% to $32.5 million and underlying profit up 13.3% to $38.9 million.
  • Now the biggest chain of KFC in Australia with 225 restaurants.

Collins Foods, the owner of Australia’s largest chain of KFC restaurants, today posted a 16% lift in full year net profit to $32.49 million.

Revenue was up almost 22% to $770.9 million as the KFC Australia business expanded through organic growth and acquisitions.

A short time ago, Collins shares were down 3.5% to $5.26.

“We successfully completed the acquisition of 25 restaurants during the financial year while continuing to drive same-store sales growth across the network,” says CEO Graham Maxwell.

Collins now has 225 KFCs in Australia plus a growing network in Europe. Last year the company paid $110.2 million to Yum! Brands for 28 KFC restaurants in Tasmania, South Australia and Western Australia.

The KFC footprint:

Source: Collins Foods

However, the long death of Sizzler restaurants, the popular family steak houses of the 1990s famous for its all-you-can-eat salad bar, cheesy bread, and dessert range all served with a range of grilled steaks and other meats, continues.

Revenue was down 22% to $50.8 million for Sizzler restaurants, with two fewer restaurants over the year, leaving just 13 open in Australia.

In Asia, however, Sizzler revenue was up 9.7% due to new restaurant openings. There were 73 Sizzler Asia restaurants operating at year end.

“We are focused on continuing to grow our KFC Australia business through transaction led same store sales growth and further improving the performance of our WA business building on the positive Q4 results it achieved,” says Maxwell.

“During FY19, in Australia we plan to drive transaction led sales growth, build eight further KFC restaurants, and maintain a focus on operational improvements and margins. Simultaneously, we will look to roll out home delivery from more KFC restaurants through both aggregators and our own channel.

“In Europe, we are already seeing positive results from our transformation plan in Germany. The integration of our KFC Netherlands restaurant network is progressing well, and we continue to realise operational efficiencies across the network as we develop our back office support functions.”

Collins Foods also opened its first Taco Bell restaurant during 2018, at Annerley in Brisbane.

The company declared a fully franked dividend of 9 cents a share.

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