Collins Foods has lifted its dividend after burgeoning food delivery app sales at the company’s Australian KFC network helped boost full-year profit.
The fast-food franchisor’s revenue for the 12 months to April 30 rose 16.9 per cent to $901.2 million, with a 3.7 per cent same-store sales growth across its 231 franchised KFC Australia stores beating last year’s 1.8 per cent growth.
The company lifted net profit 20.3 per cent to $39.1 million despite weaker trading at its KFC Europe division and reduced Sizzler Australia revenue, following the closure of two stores.
Collins on Tuesday said it will pay a fully franked final dividend of 10.5 cents, up from 9.0 cents a year ago.
Managing director and chief executive Graham Maxwell said the strong KFC Australia result had been helped by an increase in app-based sales, with 64 restaurants now supporting KFC delivery through the likes of Deliveroo and Menulog.
“Over the past 12 months we have consolidated our position as the largest KFC operator in Australia, with initiatives around digital and delivery expected to drive further growth,” Mr Maxwell said in a release to the ASX on Tuesday.
Revenue of $722.5 million from KFC Australia accounted for 80 per cent of Collins’ total global revenue during the year.
Up to 10 new KFC restaurants will be opened in Australia in FY20.
The company said a below-expectation performance at its 37 KFC restaurants in the Netherlands and Germany had been underpinned by weaker sales and higher than anticipated support costs.
Collins said the four Taco Bell stores it opened in Australia during the year were performing in line with expectations, with plans to open 10 more by the end of 2019.
“Our rollout of the Taco Bell brand in Australia will gain pace during FY20, with further restaurants to be opened in Queensland and the entry into Victoria in early 2020,” Mr Maxwell said.
The company’s global Sizzler revenue was down 8.0 per cent to $46.7 million as its Australia restaurant numbers were cut from 14 to 12.
The company said no further capital would be allocated to Sizzler Australia restaurants and the remaining outlets will continue to be assessed on an ongoing basis in relation to their individual performance and expiry of leases.
Shares in Collins Foods rose as much as 1.8 per cent to $7.805 in early trade and were still 0.13 per cent higher at $7.68 by 1125 AEST on Tuesday.
COLLINS FOOD SERVES UP FY19 PROFIT LIFT
* Net profit up 20.3pct to $39.1m
* Revenue up 16.9pct to $901.2m
* Final dividend up 1.5 cents to 10.5 cents, fully franked