Collins Foods HY24 results show booming business

Collins Foods strong sales
A strong performance from KFC was crucial to results.

Collins Foods has released its HY24 results, revealing strong growth across the group. Revenue from continuing operations rocketed up 14.3 per cent to $696.5 million (excluding Sizzler Asia). Revenue in the corresponding HY23 period was $609.4 million.

Underlying EBITDA from continuing operations lifted 16.7 per cent to $109.9 million while the underlying NPAT from continuing operations rose 28.7 per cent to $31.2 million.

Collins Foods operates as a KFC franchisee in Australia, Germany and the Netherlands. In Australia it also operates Taco Bell stores.

Collins Foods’ managing director and CEO, Drew O’Malley, said “Performance in the first half has highlighted the underlying strength of our business, and the resilience of the QSR sector in challenging economic conditions.

“Our approach to value has continued to deliver solid topline, same store sales, and earnings growth across the Group. This was underpinned by the strength of our world-class brands, our growing digital channels, and value credentials,” he said.

“We expect consumer pressures to remain high over the coming year,” said O’Malley. He said supply chain, energy and operations initiatives will continue to mitigate short-term margin pressure and boost long-term sustainability and efficiencies.

KFC, Taco Bell in Australia

Collins Foods’ added four new KFC restaurants to bring its footprint to 275 stores. It has a further nine to 12 restaurants slated to open this fiscal year.

Revenue lifted 9 per cent, up to $522.9 million, and same store sales grew by 6.6 per cent.

Nearly one third of sales (28 per cent) came through e-commerce channels (delivery, web, kiosk and app), which remain a key driver for growth.

O’Malley said new and remodelled restaurants are benefitting from design and digital innovation.

“These investments are driving e-commerce sales, unlocking production capacity, improving speed of service, and enhancing the customer experience.” 

The group’s other Australian franchise chain, Taco Bell, recorded a revenue rise of 18.9 per cent to $25.1 million. Same store sales rose 7.9 per cent, three new restaurants and product innovation helping to drive business.

Collins Foods opened an integrated restaurant connected to BP in Underwood, Queensland. Its Taco Bell footprint now numbers 27 stores: 14 in Queensland, nine in Victoria and four in Western Australia. 

KFC Europe 

The strength of the digital channels was reflected in KFC Europe’s double-digit topline growth which saw revenue rise a significant 36.5 per cent, to $148.5 million.

More than half of all sales in the Netherlands were via digital channels.

Eight KFC restaurants were integrated in the Netherlands, there was an 8.8 per cent increase in same store sales, and more than half of the sales in the Netherlands were via digital channels.

“KFC Europe’s revenue and same store sales performance over the first half has demonstrated its increasing potential as a growth engine for Collins Foods,” said O’Malley.

“Netherlands is also leading the global market on innovative energy solutions and remodels, and we will soon open our first battery-supported restaurant. While our future development pipeline continues to build in the Netherlands, we are also a key growth partner for the new KFC Germany master franchisee – an experienced KFC operator with master franchise agreements in Turkey and Northern Cyprus.” 

O’Malley forecast further acquisition and development in the broader European market in addition to the organic growth in the Netherlands.