Restaurant remodels boosts Collins Foods H1 growth

Its same-store sales for KFC Australia increased by 6.6% because of this.

Fast-food brand operator Collins Foods saw its underlying net profit after tax increase (NPAT) by 28.7% to $31.2m, as it drove more same-store sales with its investments in more digital and delivery-ready restaurant models.

The group reported that its revenues from operations increased by 14.3% $696.5m. Collins Foods also said that it reduced its debt to $173m with a Net Leverage Ratio of 1.12 as a result of strong cash generation.

For its KFC Australia operations, revenues increased by 9% to $522.9m, supported by four new restaurants and same-store sales growth of 6.6% in H1.

According to Collins Foods, same-store sales growth was driven by growth in digital and delivery. E-commerce channels (delivery, web, kiosk and app) remain a growth driver, accounting for 28.1% of sales in the first half, up from 22.2% for the same period last year.

Meanwhile, greater availability of in-store kiosks is lifting digital adoption, whilst increased personalisation of app offers has improved conversion rates.

Collins Foods Managing Director & CEO, Drew O’Malley believes that digital and delivery will be the key to the group’s growth in the long term, especially with KFC Australia.

“Convenience provides additional growth opportunities for the business, and we continue to see strong conversion in digital and delivery, with e-commerce channels up more than 25% on a year ago. We are confident this channel will account for an increasingly greater proportion of sales over the long term. New and remodelled restaurants are benefitting from design and digital innovation. These investments are driving e-commerce sales, unlocking production capacity, improving speed of service, and enhancing the customer experience,” O’Malley said.