Collins Foods (CKF) H1 2025 earnings summary

Executive summary

• Revenue increased 1.2% to $703.5 million, driven by growth in KFC Australia but offset by declines in Europe and Taco Bell; new CEO Xavier Simonet aims to drive operational excellence and profitable growth.

• Underlying EBITDA declined 6.6% to $102.7 million, with margins pressured by inflation and flat sales; underlying NPAT fell 23.8% to $23.7 million.

• Statutory net profit dropped 52.1% to $24.1 million, impacted by the prior period's $20.2 million profit from the sale of Sizzler Asia.

• Interim fully franked dividend of 11.0 cents per share declared, down from 12.5 cents in the prior year.

• Restaurant network expanded to 386 locations, with continued investment in new stores, remodels, and digital technology.

Financial highlights

• Revenue from continuing operations rose 1.2% to $703.5 million; KFC Australia up 2.7%, KFC Europe down 3.4%, Taco Bell down 2.0%.

• Underlying EBITDA: $102.7 million, down 6.6%; underlying EBIT: $52.5 million, down 14.7%; underlying NPAT: $23.7 million, down 23.8%.

• Statutory NPAT: $24.1 million, down from $50.5 million; prior period included $21.1 million from discontinued operations.

• Net debt reduced to $158.9 million, with net leverage ratio at 1.09.

• EPS: 20.2–20.5 cents, down from 24.0–25.0 cents year-over-year.

Outlook and guidance

• FY25 underlying EBITDA margin expected at 14.2%–14.7%; EBIT margin at 6.8%–7.3%.

• Interest expense for FY25 estimated at $42 million; effective tax rate expected around 33%.

• Margin pressures from inflation and weak consumer spending expected to persist through FY25, with improvement not anticipated before FY26.

• KFC Australia same-store sales improved to +0.8% in early second half; seven net new restaurants planned before FY25 year-end.

• No significant post-period events affecting operations; strong balance sheet with undrawn bank facilities of $153.6 million.