KFC profits are up for Collin’s Foods. Picture: News Corp
KFC profits are up for Collin’s Foods. Picture: News Corp

KFC operator’s plans to expand

AUSTRALIANS appear to love 'finger lickin' good' chicken, as the country's biggest KFC operator's annual profits have lifted 16 per cent.

Collins Foods, Australia's biggest KFC franchisee, has lifted full-year profit, buoyed by the addition of new stores to its network.

The group's net profit rose to $32.5 million for the year to April 29, from $28 million a year earlier, thanks to a 21.7 per cent jump in revenue to $770.9 million.

Chief executive Graham Maxwell says the company has integrated the majority of the 28 KFC restaurants it bought last year for $110 million, which has expanded its footprint across the country.

Collins Foods operates 223 KFC stores in Australia, including 136 in Queensland, 11 in New South Wales, four in Victoria, five in South Australia, 14 in Tasmania, 48 in Western Australia and five in the Northern Territory.

"Our integrations are progressing well, and our new restaurants have given the group greater geographic diversity and scale advantages to continue driving earnings growth," he said.

The acquisition of the KFC stores - which are scattered across Tasmania, South Australia and Western Australia - has taken Collins Foods' Australian KFC network to just over 220.

Since the start of the new financial year, Collins Foods has integrated a further two KFC stores with one left to complete.

The new KFC store at Edmonton which opened for the first time on the south side of Cairns in March. Picture: Justin Brierty
The new KFC store at Edmonton which opened for the first time on the south side of Cairns in March. Picture: Justin Brierty

KFC Australia's annual same store sales rose one per cent, beating the previous year's 0.7 per cent.

Collins Foods has also expanded into Europe over the past year, with 15 KFC restaurants in Germany and 18 in the Netherlands by the end of April, and plans to open another six to eight across the two countries this year.

Mr Maxwell said Germany's results had improved thanks to the company's transformation plan but its Dutch business was under pressure.

"The Netherlands is performing to expectations.

Stacked Nachos Supreme at Taco Bell in Annerley, Brisbane. Picture: AAP
Stacked Nachos Supreme at Taco Bell in Annerley, Brisbane. Picture: AAP

However, there is some overall softening of margins due to the cost of new openings," he said.

Beside its KFC franchises, Collins Foods also operates 14 Sizzler restaurants around Australia as well as 73 Sizzlers stores around Asia. It also operates one Taco Bell in Queensland.

Collins Foods also plans to open more Taco Bell restaurants in Australia over the next 12 months after its first, at Annerley in Brisbane, which opened late last year, had "performed strongly".

The fast food franchisor has maintained a final dividend of nine cents a share, taking the financial year's total to 17 cents a share, fully franked.

Taco Bell in Annerley, Brisbane. Taco Bell is expanding to Logan. Picture: AAP
Taco Bell in Annerley, Brisbane. Taco Bell is expanding to Logan. Picture: AAP

COLLINS FOODS PROFIT JUMPS

*Full-year net profit up 16.1 per cent to $32.5m

*Revenue up 21.7pct to $770.9m *Final dividend flat at nine cents, fully franked

Stocks to watch on the ASX today:

APO - APN OUTDOOR - up 3 cents, or 0.5 per cent, at $6.43 APN Outdoor will be acquired by JCDecaux after the France-based outdoor advertising giant raised its bid to $1.12 billion.

AYS - AMAYSIM - up 2.5 cents, or 3 per cent, at 86.5 cents Amaysim chief executive Julian Ogrin is quitting the mobile provider to join Foxtel, and will be replaced by company co-founder and former chairman Peter O'Connell.

BHP - BHP BILLITON - down 62 cents, or 1.9 per cent, at $32.36 BHP and its joint-venture partner Vale have reached a framework agreement with Brazilian prosecutors to negotiate settlement of a $A55.35 billion claim relating to the fatal 2015 Samarco mine disaster.

CKF - COLLINS FOODS - down 9 cents, or 1.6 per cent, at $5.36 Collins Foods, Australia's biggest KFC franchisee, has reported a 16 jump in full-year profit, buoyed by the addition of new KFC stores to its network.


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