ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

| 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

Collins Foods Ltd (ASX: CKF) shares are soaring on Tuesday morning.

At the time of writing, the ASX 200 stock is up 10% to $10.30.

This follows the release of the KFC restaurant operator's FY 2024 results.

ASX 200 stock jumps on FY 2024 results

  • Revenue from continuing operations up 10.4% to $1,488.9 million
  • Underlying EBITDA from continuing operations up 12% to $229.8 million
  • Underlying net profit after tax from continuing operations up 15.6% to $60 million
  • Fully franked final dividend of 15.5 cents per share

What happened in FY 2024?

For the 12 months ended 28 April, Collins Foods reported a 10.4% increase in revenue from continuing operations to $1,488.9 million. Continuing operations exclude Sizzler Asia.

Management advised that this was driven by growth across all business units. KFC Europe was the star of the show, reporting a 26.1% increase in revenue to $313.5 million. This was supported by an 11.7% lift in Taco Bell revenue to $54.4 million and a solid 6.6% increase in KFC Australia revenue to $1,121 million.

The ASX 200 stock's underlying EBITDA from continuing operations grew at a slightly quicker rate of 12% to $229.8 million. This reflects its strong sales growth, operational efficiencies, and cost control.

Once again, it was the KFC Europe business that was the standout. It reported a 29.6% increase in underlying EBITDA to $42.5 million. Whereas KFC Australia's underlying EBITDA rose 9.8% to $221.4 million and Taco Bell posted an underwhelming $0.7 million loss.

Though, the latter was an improvement from a $1.5 million loss a year earlier. Management notes that Taco Bell developments remain temporarily paused while it optimises its current network of 27 restaurants in suburban metro geographies.

In light of the above, a fully franked final dividend of 15.5 cents per share was declared. This brings its total FY 2024 dividends to 28 cents per share, which is up 3.7% year on year.

Management commentary

Collins Foods' interim CEO and managing director, Kevin Perkins, was pleased with the results. He said:

Collins Foods maintained its growth momentum, delivering record revenue and positive same store sales across all business units. Growth was driven by our growing footprint with 17 net new restaurants added across the Group, increased adoption of digital channels, new product innovation, and value-led initiatives. Profitability also improved over the year, benefiting from sales growth, greater operational efficiency and cost control.

Our solid FY24 performance is even more impressive given the challenging macro environment. While the QSR sector is one of the most resilient, it is not immune to the ongoing cost-of-living pressures facing consumers. As expected, trading conditions were softer in the second half given the dual impacts of inflation across all input lines and weaker consumer sentiment. We continue to manage our business for the long-term, prioritising brand health by ensuring value across the menu to retain consumer trust.

Outlook

The ASX 200 stock's growth has moderated since the end of FY 2024.

Management notes that this reflects "the continuation of a weaker consumer environment in Australia and Europe, as well as the lapping of strong growth in the prior year."

During the first seven weeks of FY 2025, KFC Australia's total sales increased 1.5%, KFC Europe sales are down 0.1%, and Taco Bell sales are up 0.6%.

Perkins commented:

Significant cost-of-living and inflationary pressures are expected to remain for much of the year ahead, impacting sales growth and we expect margin pressure across the Group.

Current conditions remain challenging, however, they have not dampened our enthusiasm for growth. We're continuing to grow our KFC network with Australian expansion in FY25 expected to be a little ahead of our development agreement commitment, and a number of new restaurants are planned for the Netherlands. We're also exploring and evaluating M&A opportunities for KFC in existing markets as well as complementary new geographies.

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 Earnings Results

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Earnings Results

Paladin Energy share price in focus on quarterly production data

The uranium producer had a reasonably constructive quarter.

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »