Sizzler restaurants, the popular family steak houses of the 1990s, are doing better than expected for owners Collins Foods.
In June last year, Collins wrote down the value of the popular family steak houses of the 1990s by $37.5 million.
The revenue slide was so bad the company decided not to invest more money in the chain, which is famous for its all-you-can-eat salad bar, cheesy bread and dessert, alongside a range of grilled steaks and other meats.
There’s still no further investment, but Collins says sales were better in the latest half year than expected. EBITDA (earnings before interest, taxes, depreciation and amortisation) increased by 27.3% to $2.7 million compared to the same six months in 2016.
The company says the performance was driven by an improvement in Sizzler Australia same store sales growth to a flat -0.6% from a 12.0% fall the year before.
One Sizzler Australia store closed during the half year, leaving just 21.
However, Sizzler Asia has opened four new restaurants so far this financial year. The company has 69 franchised Sizzler restaurants around Asia.
But the biggest business for Collins is still its 190 KFC restaurants. The company expects to open five or or six new KFC stores in Australia in 2017.
KFC delivered $249.6 million of revenue in the half year to October, a rise of 6.4%.
For the company as a whole, revenue was up 4.7% to $282.5 million. Profit was up 17.8% to $15.44 million.
Collins declared an interim fully franked dividend of 8 cents, up from 6 cents.
A short time ago, Collins shares were up 4.8% to $5.87.
Collins has expanded to Europe, buying 11 KFC restaurants in Germany.
“We are very pleased with the overall performance of the Collins Foods business, particularly the ongoing strength of our KFC businesses,” says CEO Graham Maxwell.
“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.”
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