Sizzler restaurants, the popular family steak houses of the 1990s, are on their way out.
Its owner, Collins Foods, today wrote down the value of Sizzler by $37.5 million as the restaurant chain’s revenue fell 8.5% to $88.5 million.
The company will not be investing any more money in the chain, which is 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.
“We no longer consider Sizzler to be a strategic growth prospect in Australia and therefore we will not be investing further capital,” says CEO Graham Maxwell.
At the height of their popularity Sizzler restaurants were seen as havens for parents where they could eat well and still take their small children to dinner.
Sizzler has just 26 stores left across Australia, predominantly in regional cities in Queensland, where there are 18 stores. Three survive in western Sydney.
Here’s the situation in numbers:
EBITDA (earnings before interest, taxes, depreciation, and amortisation) for Sizzler was down a massive 42.6% to $4.5 million, a strong indication of declining customer numbers.
However, the company still forecasts Sizzler Australia to generate positive earnings in the 2016 financial year.
Collins Foods says a “limited” number of restaurants will be closed in the new financial year and the remaining restaurants will be closely monitored.
However, Sizzler will live on in Asia where the steaks are selling well. Two new restaurants are planned for Thailand and there are growth plans for China.
The write downs on Sizzler pushed Collins Foods to a full year statutory loss of $10.4 million compared to a $14 million profit the year before.
The underlying results for the company are still good on the back of the company’s 171 KFC outlets.
Overall, underlying profit at Collins Foods was up 37.4% to $24.6 million, driven by a 46.7% revenue growth for KFC after adding restaurants in Western Australia and Northern Territory.
Revenue increased 34.4% up to $571.6 million.
Maxwell says he expects further growth over the next financial year, expanding the KFC business.
Collins Food shares are up 3.38% to $2.75.