Collins Food Limited (ASX:CKF) reported NPAT of $14.3 million for the half year, compared to a net loss of $22.9 million in the pcp.
Collins reported that its revenues from ordinary activities increased 5.1% compared to pcp. The group reported a 33.6% increase in NPAT, as a pre-tax non-cash impairment charge of 36.5 million during pcp weighed the profits down. EBITDA was reported 19.8% higher. The company declared an interim dividend of 6 cents per ordinary shares, which is a 20% increase over last year. The group reported an improved net leverage ratio of 1.6 compared to 24.7 and its EPS increased to 15.4 from a negative 24.7 cents. The group reported net cash flow of $5.4 million compared to a negative 3.8 million in HY15. Capex has been decreased by $2.8 million on prior year.
Collins reported top line growth of 8.7% and same stores sales grew 5.2% in its KFC operations. KFC Margins have improved during the half year. The group’s Sizzler Australia is now being managed as a non-core asset. Overall revenue in this operation was down 13.9% following a closure of 3 restaurants in the half year. The group will not invest further growth capital in this operation. Collins aims to open a new Snag Stand at Pacific Fair and incorporate new brand elements.
Commenting on the HY16 results, Collins Food’s Chief Executive Officer, Mr Graham Maxwell said: “We are very pleased with the overall performance of the Collins Food business, particularly the ongoing strength of our KFC business in both Queensland and Western Australia/ Northern Territory. They have achieved strong same store sales growth and continue to deliver improved margins resulting from our ongoing focus on operational performance.”
The group states that priorities for the year ahead remain on growth of the KFC business which will be acheived through existing store sales growth, building new stores and remodelling existing ones and exploring acquisition opportunities. The group will also aim to refine its Snag Stand model and set the dividend payout ratio to 50% of fully year NPAT excluding KFC WA/NT.
CKF last traded at $4.37 as of 11:19 AM (AEDT), up 12% since the announcement released this morning. The stock is up 95% for the year.
Author: Imran Valibhoy
Dec 02, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.