Collins finger-lickin good

KFC’s largest franchisee records 16% profit jump

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,” Mr Maxwell 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 be completed.

KFC Australia’s annual same store sales rose 1 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,” he said. “However, there is some overall softening of margins due to the cost of new openings.”

Besides its KFC franchises, Collins Foods also operates 14 Sizzler restaurants around Australia as well as 73 Sizzler 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”.