KFC delivers billion-dollar record for Collins Foods

Flipping burgers through the pandemic delivered KFC operator Collins Foods record revenues, a bigger profit and bonuses for over 100 employees.

Collins Foods chief executive Drew O'Malley. Picture: Supplied.

KFC and Taco Bell fast-food restaurant operator Collins Foods traded busily through the pandemic, delivering record revenues of $1.07bn and 5 per cent increase in profit to $33m, the first under chief executive Drew O’Malley.

The 12.4 per cent revenue surge for the 52 weeks ended May 2, despite Covid-19 lockdowns and restrictions, compared to the $948.1m reported in FY20.

KFC Australia’s revenue increased 13.8 per cent to $900.4m.

Collins Foods closed its Sizzler restaurants business in Australia in November last year, a casualty of the pandemic lockdowns and restrictions, but trading across its 251 KFC stores and 16 Taco Bell outlets is strong.

“Collins Foods successfully navigated the unprecedented challenges of Covid-19 to deliver another year of strong earnings growth in FY21,” said Mr O’Malley, who was also appointed managing director on Tuesday.

“The brand is quite resilient and we have not seen any material impact of the ongoing lockdowns and restrictions around the country.

“Like everybody else, we are supportive of the government’s plan to accelerate the vaccination program.”

While KFC is the standout performer for the Queensland-based business, revenues from the Taco Bell business grew 57.4 per cent to $28m.

Collins Foods opened 18 new restaurants in the period – 11 KFC and 4 Taco Bell outlets in Australia and three KFC Europe restaurants, funded out of strong operating cash flow.

“While maintaining an attractive dividend payout, surplus cash flow has been used to further strengthen our balance sheet, reducing net debt and affording capacity for further expansion opportunities as and when they arise,” Mr O’Malley said.

The “outstanding results” meant that short term incentive payments were triggered for all Australian-based key management personnel and management and support teams.

The results delivered a short-term cash reward of $460,996 for Mr O’Malley, $347,184 for chief financial officer Nigel Williams and $211,502 for chief people officer Dawn Linaker.

Total remuneration for Mr O’Malley came in at more than $2m, including long term incentives and other benefits.

His new add-on role as managing director will also provide a healthy boost to his base salary, which has increased to $900,000, from $721,692.

Collins will pay a final dividend of 12.5c, which takes the full year payout to 23.0c, up 15 per cent on FY20.

It expects to open 9-12 new KFC Australia restaurants and 9-12 Taco Bell restaurants in the year ahead.

Collins Foods also operates KFC restaurants in the Netherlands and Germany and the Sizzler chain in Asia.

Shares in Collins Foods, valued at about $1.5bn, were trading at $12.70 ahead of the results.