Collins Foods Limited

Positive Outlook: Collins Foods Limited (ASX: CKF) has recorded growth in consolidated revenue growth at a CAGR of 10.6% during FY13-17. Improved EBITDA margin by 27 bps resulted into 7.5% moderate rise in EBITDA to $ 24.0 Mn in 1HFY18. However, NPAT was down by 17.5% and amounted to $ 12.7 Mn as compared to prior corresponding period (pcp). As a result, basic EPS came at 11.31 cents per share in 1HFY18 compared to the previous corresponding period. During the first half of 2018, the group has completed acquiring five out of 28 restaurants from Yum!  while the rest of 23 would be finished in the second half. Moreover, the group has launched a new KFC app which is performing well and is processing over 13,000 transactions each week. The group might also benefit from various sports events.

For rest of the fiscal year of 2018, the group continues to focus on growing its core KFC Australian business through same store sales growth, integrating the newly acquired restaurants in WA, SA and Tasmania, building new stores and positioning delivery for further roll-out. The group continues to invest into KFC brand innovation and technology which remains a major factor to effectively compete against their QSR peers and maximize the shareholder returns. The Sizzler Asia growth is improving and is expected to support this. Moreover, the group got a positive early response for their first Taco Bell store that was recently opened, and it also intends to rollout another two stores in a considered fashion to ensure consumer acceptance before undertaking a major rollout of this chain.

Based on the decent performance in 1HFY18, the Board of Directors has declared a fully franked interim dividend of 8.0 cents per ordinary share which is in-line with previous corresponding period.Looking at historical dividend performance, the company will continue to pay its dividend to its shareholders. Meanwhile, CKF stock has risen 8.70 per cent in the past three months as at June 18, 2018 and is trading above 52-week lower level ($4.870). Hence, we maintain our “Buy” recommendation on the stock at the current price of $ 5.470, considering positive outlook at the back of increasing footprints across the regions and growing dividends.


Dividend Performance (Source: ASX)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.