Guess which ASX 200 stock jumped 10% after posting strong half-year results

This ASX 200 delivered a finger lickin' good result.

| More on:
Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Collins Foods Ltd (ASX: CKF) share price is having a strong session.

In morning trade, the quick service restaurant operator's shares are up 10% to a 52-week high of $11.16.

This follows the release of the ASX 200 stock's half-year results.

ASX 200 stock jumps on half-year update

Here's how Collins Foods performed for the six months ended 15 October:

  • Revenue from continuing operations up 14.3% to $696.5 million
  • Underlying EBITDA from continuing operations up 16.7% to $109.9 million
  • Underlying net profit after tax from continuing operations up 28.7% to $31.2 million
  • Statutory net profit after tax up 359% to $50.5 million
  • Fully franked interim dividend up 4.2% to 12.5 cents per share

What happened during the half?

For the six months, Collins Foods reported a 14.3% increase in revenue from continuing operations to $696.5 million. This reflects strong growth across all business units.

KFC Australia reported a 9% lift in revenue to $522.9 million, KFC Europe posted a 36.5% increase in revenue to $148.5 million, and Taco Bell delivered an 18.9% jump in revenue to $25.1 million. This reflects store expansions and same-store sales growth of 6.6%, 8.8%, and 7.9%, respectively.

Things were even better for its earnings, with underlying EBITDA from continuing operations up 16.7% to $109.9 million.

This was driven by its KFC Australia and Europe businesses, which reported an 11.1% and 53% increase in underlying EBITDA, respectively. And while the Taco Bell business continues to post a loss, it improved to just $0.1 million for the six months.

Management commentary

The ASX 200 stock's managing director and CEO, Drew O'Malley, was pleased with the half. He said:

Performance in the first half has highlighted the underlying strength of our business, and the resilience of the QSR sector in challenging economic conditions. Our approach to value has continued to deliver solid topline, same store sales, and earnings growth across the Group. This was underpinned by the strength of our world-class brands, our growing digital channels, and value credentials. As higher cost-of-living pressures continue to impact consumers, offering great tasting food that provides exceptional value has never been more important.

Our restaurant footprint continues to grow with five new builds added across the Group over the first half. We remodelled a further thirty restaurants and continue to innovate format design to support the global shift towards digital and delivery channels. While inflationary pressures remain, we managed short-term cost impacts through margin support initiatives that improved profitability in the first half while prioritising long-term brand health and consumer trust. And as always, we have done this on the foundations of operational excellence at the heart of what Collins Foods stands for.

Trading update

Pleasingly, Collins Foods' positive momentum has carried over into the second half. O'Malley advised:

Sales continued to grow in the first six weeks of the second half with KFC same store sales up +2.9% in Australia, +8.1% in Netherlands, +8.6% in Germany, while Taco Bell continued its positive trajectory with same store sales up +8.7%.

No guidance has been given for the full year.

Motley Fool contributor James Mickleboro has positions in Collins Foods. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

businessman handing $100 note to another in supermarket aisle representing woolworths share price
Consumer Staples & Discretionary Shares

Everything you need to know about the Woolworths dividend

Woolworths will pay out its largest interim dividend in three years in 2024.

Read more »

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Woolworths share price dives 7% following Banducci bombshell

ASX 200 investors are pressuring the Woolworths share price today amid the shock departure of CEO Brad Banducci.

Read more »

Two parents and two children happily eat pizza in their kitchen as a top broker predicts a 46% upside for the Domino's share price
Earnings Results

Domino's share price charges higher on improving outlook

Here's how this struggling pizza chain operator performed during the first half.

Read more »

two men in suits with their backs to the camera walk off into a sunset on a city street with one placing his hand on his companion's shoulder as if in a fond gesture.
Earnings Results

Woolworths shares on watch after CEO exit and $781 million loss

Brad Banducci retires as New Zealand business devastates the supermarket's bottom line.

Read more »

Money Wealth Coin on Shopping Cart and grow up as creative investment ideas.
Dividend Investing

If I invest $10,000 in Woolworths shares, how much dividend income will I receive in 2024?

The supermarket giant is due to report its 1H FY24 results and interim dividend tomorrow.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Earnings Results

Guess which ASX 200 stock is surging 13% after solid half-year result

This stock is charging higher after investors responded positively to its results release.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
52-Week Lows

Star Entertainment share price crashes 26% upon return to trade

This is a new 52-week low.

Read more »

jumbo share price
Consumer Staples & Discretionary Shares

A fund manager is betting on this ASX 300 stock. Is it a buy?

WAM has picked out a compelling stock to buy.

Read more »