Collins Foods FY profit jumps

KFC and Sizzler franchisee, Collins Foods Ltd, has fallen despite flagging a return to earnings growth after posting a strong rise in net profit for the fiscal year to April amid a subdued retail environment.

KFC and Sizzler franchisee, Collins Foods Ltd, has fallen despite flagging a return to earnings growth after posting a strong rise in net profit for the fiscal year to April amid a subdued retail environment. 

The stock has shed 0.9% to $1.63 as of 1050 AEST.

The company, which is the largest franchisee of KFC restaurants in Australia, posted a 43% rise in net profit to $16.368 million for the financial year to April 28, from $11.429 million in the previous corresponding period.

However, if taken on a pro-forma basis the group's net profit fell 10.9% to $16.4 million on $18.4 million in the priod period, largely on one-off cost savings and an 20% increase in energy costs driven by the carbon tax.

Revenue rose 4.4% to $423.9 million, from $406 million year-on-year.

Collins Foods chief executive officer Kevin Perkins said the result reflected "encouraging" underlying growth in both revenue and earnings despite continuing challenging market conditions.

“Taking into account the significant increase in utility costs driven primarily by the carbon tax in FY13 and the one‐off cost savings taken in the prior year, this is a strong result, and in line with market expectations,” Mr Perkins said.

Mr Perkins flagged a return to earnings growth for the 2013-14 financial year, saying "new products and efficiency initiatives" were stabilising margins.

Taken on a pro-forma basis, earnings before interest, tax, depreciation and amortisation fell to $47.2million from $51.1million the previous year.

Collins Foods will pay a fully-franked final dividend of 5.5 cents per share, down on the 6.5 cents per share paid last fiscal year.

The group operates 122 KFC restaurants in Queensland and northern New South Wales. It also owns and operates 27 Sizzler restaurants in Australia and has 56 Sizzler franchises in South East Asia, mainly in Thailand.

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