Collins Foods (ASX:CKF) boosts FY22 revenue; how are shares faring?

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Collins Foods (ASX:CKF) boosts FY22 revenue; how are shares faring?

 Collins Foods (ASX:CKF) boosts FY22 revenue; how are shares faring?
Image source: © Herrbullermann | Megapixl.com

Highlights

  • Collins Foods announced a robust sales and earnings growth for FY22.

  • The ASX-listed restaurant operator reported a rise of 12.6% in underlying EBITDA.

  • The net operating cash flow was AU$156.3 million.

Buoyed by a rebound in European demand, Collins Foods Ltd (ASX:CKF) on Tuesday announced a robust in its sales and earnings for the year ending 1 May 2022.  The ASX-listed food service retail outlet operator reported a revenue rise of 11.1% to AU$1184.5 million in FY22.

Triggered by the positive update, Collins Foods shares jumped 10.18%, as of 10:08 AM (AEST).

Collins Foods also announced a rise of 12.6% in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations to AU$209.2 million. Similarly, the statutory net profit after tax (NPAT) climbed 47.2% to AU$54.8 million.

The company’s net operating cash flow was AU$156.3 million.

In Australia, Collins Foods operates/franchises KFC and Taco Bell restaurants. In Netherlands and Germany, the company is a franchisee of KFC restaurants.

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Dividend

The board of Collins Foods announced a fully franked final dividend of 15 cents per ordinary share for FY22 compared to a fully franked dividend of 12.5 cents for FY21. With this, the total dividend for the fiscal year 2022 stands at 27 cents per share fully franked, representing a rise of 17.4% on the prior year.

What did Collins Foods’ management say?

Collins Foods’ Managing Director & CEO Drew O’Malley was upbeat about the strong earnings.

Collins Foods also informed the exchange that Taco Bell has swung back to positive same store sales growth in the fourth quarter of FY22.

Outlook

Sharing his views on outlook, O’Malley said that the company’s QSR brands were in ‘excellent shape’ to navigate the challenges posed by inflationary pressures and supply chain shortages.

The company plans to increase it store footprint across the QSR brands. It has a target to open 20 to 29 new restaurants in the fiscal year 2023. It would include 9 to 12 new KFC Australia restaurants and 2 to 5 new KFC Europe restaurants. Additionally, the company wants to increase its Taco Bell rollout with 9 to 12 new additions.

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Collins Foods’ share price snapshot

Following this update, shares of Collins Foods were trading at AU$9.85, up 10.18% by 10:08 AM (AEST). The stock has fallen nearly 28% on a year-to-date (YTD) basis. In the past year, the stock has fallen over 22%, while in the past month, the share price has risen over 3%.

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