Collins Foods (CKF) H1 2025 earnings summary

Executive summary

• Revenue increased 1.2% year-over-year to $703.5 million, driven by growth in KFC Australia but offset by declines in Europe and Taco Bell segments amid challenging consumer conditions and inflationary pressures.

• Underlying EBITDA declined 6.6% to $102.7 million, with margins pressured by flat sales, inflation in labour, energy, and input costs.

• Statutory NPAT dropped to $24.1 million from $50.5 million, mainly due to a prior-year gain on sale of Sizzler Asia.

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

• Restaurant network expanded to 386 locations, with 6 new KFC Australia stores and 22 remodels completed.

Financial highlights

• Revenue: $703.5 million, up 1.2% year-over-year; KFC Australia up 2.7%, KFC Europe down 3.4%, Taco Bell down 2.0%.

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

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

• Cash conversion strong at 108%; net operating cash flow $75.3 million.

• Fully franked interim dividend of 11.0 cents per share declared.

Outlook and guidance

• FY25 group underlying EBITDA margin expected at 14.2%-14.7%, EBIT margin at 6.8%-7.3%.

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

• Full-year interest expense for FY25 estimated at $42 million; effective tax rate expected around 33%.

• Seven new restaurants planned before FY25 year-end, including 3 in Australia and 4 in the Netherlands.

• No significant post-period events affecting operations or results.