Recovery in Europe lights up Collins Foods’ (ASX:CKF) growth

Highlights

  • Collins Foods continues to grow as announced in results for the half-year ended 17 October 2021 (HY22).
  • The growth in Collins’ European operations has led to the overall rise in numbers during the period.
  • Revenue is up 8.5%, EBITDA is up 10%.
  • Besides acquisitions, services such as drive-thru, click-and-collect have contributed to the gains.
  • The Company has declared a fully franked interim dividend of 12.0 cents per ordinary share.

ASX-listed Australia-based Company, involved in the operation, management, and administration of restaurants, Collins Foods Limited (ASX:CKF), on Tuesday, announced its results for the half-year ended 17 October 2021 (HY22).

According to the Company, during the period, Collins Foods witnessed growth, thanks to a recovery in its European operations. Collins’ revenue rose by 8.5% to AU$534.2 million, and statutory EBITDA from continuing operations grew 10.0% to AU$92.5 million. 

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The Company informed that KFC Europe was the standout performer, witnessing a robust recovery with revenue and earnings back above pre-pandemic levels. In addition, the Company has made considerable progress towards unlocking the long-term potential of its Netherlands business unit, signing a Corporate Franchise Agreement (CFA) and announcing the acquisition of other nine restaurants. The KFC Netherlands CFA will help the Company to scale its footprint over the next ten years, backed by improved marketing activity to drive greater brand awareness and growth.

Meanwhile, the stock CKF was spotted trading 7.747% higher at AU$13.490 per share on ASX at 12:30 PM AEDT.  

In its HY22 results, the Company revealed:

  • Revenue grew by 8.5% to AU$534.2 million compared to AU$492.3 million in HY21.
  • Statutory EBITDA from continuing operations rose 10.0% to AU$92.5 million.
  • Underlying EBITDA from continuing operations increased 13.1% to AU$94.9 million against AU$83.8 million in HY21.
  • Underlying NPAT from continuing operations up 31.6% to AU$28.9 million (HY21: AU$21.9 million).
  • Fully franked interim dividend of 12.0 cents per ordinary share declared.

Road Ahead!

Further acquisition of nine restaurants announced in October 2021 will take the Company’s restaurant footprint in the Netherlands to 44 locations and 55% franchisee share. Acquisitions contributed AU$7.9 million to KFC Europe revenue for the half and offered extra trade zones for future development. The Company is on track to open a record number of new restaurants this financial year.

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