Australia's Collins Foods jumps on KFC franchisee's strong start to FY24

Collins Foods

27/06/2023 05:22

June 27 (Reuters) - Shares of Collins Foods  CKF.AX 
surged more than 17% on Tuesday in their biggest intraday jump
in nearly three years, as the KFC franchisee reported strong
annual earnings on the back of restaurant networks expansion and
e-commerce growth.
    The fast food chain operator's shares climbed as much as
17.4% to A$9.23, posting their biggest intraday gain since June
2020. They were trading at A$9.19, as of 0322 GMT.
    The stock was the biggest gainer on the ASX 200 benchmark
index  .AXJO , which was up 0.6%.
    Collins Foods, which operates 272 franchised KFC restaurants
in Australia, recorded positive same-store sales growth for the
first seven weeks of the 2024 fiscal year.
    Collins Foods-operated KFC restaurants logged an 8.8% growth
in Australia, 9% in the Netherlands and 12.4% in Germany.
Collins Foods-operated Taco Bell restaurants delivered a 2.1%
same-store sales growth.
    For fiscal 2023, Collins Foods said revenue from continuing
operations increased 14.2% to A$1.35 billion ($906.80 million).
    However, high costs and energy bills dragged down underlying
net profit after tax from continuing operations to A$51.9
million from A$59.0 million.
    Collins Foods warned that inflation could continue to exert
pressure on margins for much of fiscal 2024, adding that the
year ahead could have "ample challenges".    

($1 = 1.4888 Australian dollars)

 (Reporting by John Biju in Bengaluru; Editing by Subhranshu
Sahu)
 ((John.Biju@thomsonreuters.com;))