Collins Foods (ASX:CKF) share price higher on finger-lickin’ good result

Collins Foods’ result was finger-lickin’ good…
The post Collins Foods (ASX:CKF) share price higher on finger-lickin’ good result appeared first on The Motley Fool Australia. –

The Collins Foods Ltd (ASX: CKF) share price has been a strong performer on Tuesday morning following the release of its half year results.

At the time of writing, the quick service restaurant operator’s shares are up 3% to $12.88.

Collins Foods share price higher on strong profit growth

Revenue up 9.5% to $534.2 million
Statutory EBITDA from continuing operation up 10% to $92.5 million
Underlying EBITDA from continuing operations up 13.1% to $94.9 million
Underlying net profit after tax up 31.6% to $28.9 million
Fully franked interim dividend up 14.3% to 12 cents per share

What happened during the first half?

For the six months ended 17 October, Collins Foods delivered a 9.5% increase in revenue to a record of $534.2 million. This was driven by a return to growth from its European operations and solid performances from the rest of the business.

KFC Australia delivered a 4.4% increase in revenue to $433.7 million, KFC Europe’s revenue grew 31.7% to $84.7 million, and Taco Bell Australia’s revenue jumped 33% to $14.8 million. The former was achieved despite cycling very strong same store sales growth in the prior corresponding period.

Things were even better on the bottom line, with Collins Foods reporting a 31.6% increase in underlying net profit after tax to $28.9 million.

And while its operating cash flow was weaker compared to a year ago, that didn’t stop the company from increasing its interim dividend by 14.3% to 12 cents per share.

Another positive was its store expansion. The company notes that it increased its restaurant footprint by nine to 322 during the half. This means it is on track to open a record number of new restaurants this financial year.

Management also highlighted that it has a significant organic growth pipeline and attractive opportunities to reach scale in KFC Netherlands and Taco Bell Australia, while adding to its core KFC Australia footprint.

Management commentary

Collins Foods’ Managing Director & CEO, Drew O’Malley, commented: “Collins Foods has successfully leveraged brand strength, scale and operational efficiency to deliver another strong first half result.”

“Record revenues were achieved in KFC Australia, despite cycling exceptional same store sales (SSS) growth in HY21. The KFC brand is stronger than ever and continues to take market share in a growing but competitive chicken category. Growth in digital and delivery channels, ongoing investment in innovation, and a laser focus on customer experience and operational excellence has enhanced convenience and is driving brand loyalty,” he added.


While no guidance was provided for the full year due to COVID uncertainty, management remains positive on its outlook over the medium and long term.

Mr O’Malley said: “We see attractive opportunities for continued growth across the group, leveraging digital and delivery innovations to further grow our core KFC Australia business and scale our KFC Europe and Taco Bell brands. Collins Foods’ strong cash generation and healthy balance sheet supports our growth strategy, and we remain on track to open up to 24 new restaurants across the group in FY22.”

“Whilst there is significant opportunity in the medium and long term, uncertainties remain in the short term with rising COVID-19 cases heading into the European winter,” he added.

The post Collins Foods (ASX:CKF) share price higher on finger-lickin’ good result appeared first on The Motley Fool Australia.

Should you invest $1,000 in Collins Foods right now?

Before you consider Collins Foods, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Collins Foods wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

ASX 200 (ASX:XJO) midday update: AMP shares jump, Collins Foods impresses

5 things to watch on the ASX 200 on Tuesday

ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light

Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!