Press photo. /KFC
Collins Foods profits jumps 10.4% in FY2024
The group's operations in KFC and Australia both saw same-store sales growth.
Collins Foods revenue from continuing operations increased by 10.4% to $1.488b in FY2024 from $1.348b from a year before.
Underlying Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) from continuing operations were up 12% to $229.8m (FY2023: $205.1m) driven by sales growth, operational efficiencies, and cost control.
In its KFC operations in Australia, revenues in FY2024 went up 6.6% to $1.121b (FY2023: $1.051.3b) whilst same-store sales (SSS) growth went up 3.8% (FY2023: 5.8%).
Meanwhile, Taco Bell saw revenues up by 11.7% in 2024 with SSS up 3.5% compared to a year before.
Collins Foods said the development of the Taco Bell brand is paused temporarily as the operator ‘optimises its current network of 27 restaurants in suburban metro geographies’
"Our solid FY24 performance is even more impressive given the challenging macro environment. Whilst 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,” Perkins said.
Pressures expected to remain
Significant cost-of-living and inflationary pressures are expected to remain for much of the year ahead and will continue to impact sales growth for Collins Foods.
Collins Foods operates 279 KFC restaurants in Australia and 75 in Europe. The group also operates 27 Taco Bell restaurants in QLD, VIC, and WA.
According to the group, sales in the first seven weeks of FY2025 reflected the continuation of a weaker consumer environment in Australia and Europe, as well as the lapping of strong growth in the prior year. In addition, the conflict in the Middle East has continued to impact sales, particularly in the Netherlands.
KFC Australia's total sales increased 1.5% during the period with SSS partially impacted by short-term cannibalisation from the addition of new restaurants, down (0.8)%. Total KFC Europe overall sales remained relatively stable, down (0.1)% in the first 7 weeks, with SSS down (2.3)% in the Netherlands and (2.8)% in Germany. Taco Bell's positive momentum has continued into the new fiscal year with SSS up 0.6%
“Encouragingly, we are seeing commodity prices stabilising further. However, labour and energy costs remain elevated globally. Whilst we are confident margins will recover as trading conditions improve, we also recognise the importance of maintaining brand health to ensure our mid and longer-term success. Our consistent approach to everyday affordability and product innovation will continue in FY2025 - key pillars of the strategy that have enabled us to weather the challenging macro environment better than many of our peers. At the same time, the strong operational expertise of our management team will continue to find efficiencies across labour, supply chain, and energy,” Interim CEO and Managing Director, Kevin Perkins said.
