Collins Foods Limited (ASX:CKF) maintained its Dividend reinvestment plan for the FY26 final dividend, giving eligible shareholders the option to reinvest all or part of their dividend entitlement in additional Collins Foods shares. The company declared a fully franked final dividend of 15 cents per share, taking its total FY26 dividend to 28 cents per share.

The full-year distribution comprised a 13 cent Interim Dividend and a 15 cent final dividend, both fully franked. The FY26 total dividend increased 7.7% from 26 cents per share in FY25, alongside higher Revenue and underlying earnings.

Latest developments

Collins Foods reported revenue from continuing operations of AUD 1,592.6 million for FY26, an increase of 8.6% from the previous year. Underlying EBITDA increased 6.3% to AUD 244.5 million, while underlying net profit after tax rose 13.0% to AUD 61.4 million.

Statutory net profit after tax from continuing operations increased to AUD 47.1 million. Net Debt declined by AUD 18.3 million to AUD 119.6 million, while the company’s net Leverage Ratio improved to 0.77 times from 0.93 times.

The company also continued reshaping its restaurant portfolio during the period. Collins Foods completed the Acquisition of eight KFC restaurants in Munich, expanding its German operations, while progressing its exit from the Taco Bell Brand to concentrate on its KFC businesses in Australia and Europe.

Key numbers

KFC Australia remained the company’s largest operation in FY26, generating revenue of AUD 1,241.3 million, up 7.6%. Same-store sales increased 2.7% during the year as the Business continued restaurant development, remodels and operational initiatives.

The European KFC business generated revenue of AUD 351.3 million, representing growth of 12.5%. Germany remains a key development market for Collins Foods, while improving operating performance in the Netherlands continues to form part of management’s priorities.

The company generated Operating Cash Flow of AUD 150.1 million during FY26. The reduction in net debt provided additional balance-sheet flexibility while Collins Foods continued investing in restaurant development, technology and refurbishment programs.

About the company

Collins Foods operates quick-service restaurants, with its business now focused on the KFC brand across Australia, Germany and the Netherlands. The group employs more than 21,000 people and operates several hundred restaurants across these markets.

Australia remains the company’s largest market, while Germany has become an important component of its European growth strategy. The company has identified expansion of its Australian restaurant network, profitable growth in Germany and improving restaurant-level execution as key strategic priorities.

Managing Director and Chief Executive Officer Xavier Simonet leads the company as it focuses its portfolio on KFC following the decision to exit Taco Bell.

How the DRP works

Collins Foods’ dividend reinvestment plan allows eligible shareholders with registered addresses in Australia and New Zealand to reinvest all or part of their dividend payments in additional fully paid Collins Foods shares.

Under the current framework, DRP shares are allocated using the average of the daily volume-weighted average price of Collins Foods shares traded on the ASX over ten trading days commencing on the second trading day after the relevant dividend record date. The company currently applies no discount to the allocation price.

No brokerage, commission or other Transaction Costs are payable by participating shareholders. Shares allocated under the DRP rank equally with the company’s existing fully paid shares.

For the FY26 final dividend, the Record Date was 14 July 2026, the DRP election deadline was 15 July, and the pricing period ran from 16 July to 29 July. The final dividend and corresponding DRP allocation were completed on 11 August 2026.

Why the DRP matters

The DRP provides shareholders with an alternative to receiving their entire dividend entitlement in cash. Eligible participants can instead apply some or all of the payment toward acquiring additional Collins Foods shares without brokerage or other transaction costs under the plan.

Collins Foods increased its FY26 dividend while also reporting higher underlying Earnings and lower net debt. However, future distributions remain dependent on earnings, cash generation, investment requirements and decisions by the board.

The fully franked nature of the FY26 distribution means franking credits were attached to the dividend. The value and tax treatment of those credits depend on individual Shareholder circumstances.

What comes next

Collins Foods has not provided formal FY27 earnings guidance. At its September AGM, management reiterated its strategic priorities of growing the Australian business, building its German operations profitably and improving restaurant execution across the group. FY26 continuing-operations revenue of AUD 1,592.6 million and underlying NPAT of AUD 61.4 million were also reaffirmed at the meeting.

The company’s FY27 financial calendar indicates that its half-year results are scheduled for 8 December 2026. The record date for the FY27 interim dividend is currently scheduled for 14 December, followed by the DRP election deadline on 16 December and payment on 11 January 2027.

Management is also continuing to focus on growth in Australia and Germany while addressing operating conditions in its European markets. The Taco Bell exit leaves Collins Foods concentrated on its KFC portfolio.

Risks and context

Future dividends are not guaranteed and remain dependent on operating performance, cash flows, Capital Expenditure requirements and board approval. Although Collins Foods increased its FY26 dividend, changing consumer conditions or higher operating costs could affect future earnings and distributions.

The company remains exposed to food, labour and occupancy cost pressures as well as changes in consumer spending. Its European operations also face market-specific economic conditions, while expansion in Germany requires disciplined restaurant development and operating execution.

Collins Foods also relies on its Franchise relationship with KFC and remains exposed to foreign currency movements associated with its European businesses. The company must balance shareholder distributions with investment in restaurant openings, refurbishments, technology and other growth initiatives.

Key Insights

Collins Foods increased its fully franked FY26 dividend to 28 cents per share while keeping its DRP available to eligible shareholders. The plan allows participants to reinvest all or part of eligible dividends into additional Collins Foods shares without brokerage or transaction costs.

FY26 revenue from continuing operations increased 8.6% to AUD 1,592.6 million, underlying NPAT increased 13.0% to AUD 61.4 million and net debt declined to AUD 119.6 million. The company is now focused on its KFC businesses in Australia, Germany and the Netherlands as it progresses its next phase of restaurant development.