Collins Foods presses ahead with Taco Bell
Collins Foods will launch its second Taco Bell restaurant in Australia early next year before reviewing the possibility of a further roll-out after being encouraged by initial trading from its Queensland test store.
Providing more detail about the well-known US brand locally alongside its half-year results on Wednesday morning, Collins CEO Graham Maxwell said there will be at least three Taco Bell locations operational by the end of 2018.
“Taco Bell presents an exciting opportunity to introduce a new Mexican food brand to Australia. Already we are pleased with the customer acceptance of the Taco Bell brand and look forward to the roll-out of additional stores in 2018,” he said.
Collins has been trading from its initial Taco Bell location in Annerley since September. It is the third attempt the brand has made at the Australian market, following failed ventures in the 1980s and 90/00s.
But it wasn’t all good news for Collins, which booked a 17.5 per cent decrease in statutory net profit after tax to $12.7 million for the half year due to $4.7 million one-off acquisition costs, refinancing and the closure if the Snag Stand business.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was up 3.7 per cent to $17.4 million though on the back of a 14 per cent increase in revenue to $322.1 million.
The group’s flagship KFC business in Australia saw same store sales grow by 1.2 per cent, with 5 of the 28 restaurants it bought from Yum! In June integrated fully into the portfolio so far.
Comparable store sales in WA were negative though, and while EBITDA for the business increased by 7.6 per cent, margin was down 0.1 per cent.
Sizzler revenue was down 23 per cent to $24 million, while same-store-sales declined 1.3 per cent, amid 2 local store closures that have brought the Australian footprint to just 14 – although the brand is expanding in Asia, with one location in Thailand and another in China added during 2H18.
Management has decided to exit its Snag Stand business following a strategic review, which is due to be completed by the end of FY18. Associated costs of $1.2 million have been booked.
The company’s KFC operations in the Netherlands saw same-store sales increase by 0.2 per cent and have now been integrated and is “performing to expectations, with two additional stores to be opened before the end of the calendar year.
In Germany, where same-store-sales increased by 0.4 per cent, a business transformation program has kicked off to renew and retrain management and staff, refine the value offering and the operational execution of the business.
Maxwell said Collins will continue to expand its presence in Europe now that it has established a footprint of 31 KFC stores.
“We are committed to expanding our KFC presence through new store openings and building a strong and efficient back office to support our European operations, while delivering operational excellence.
“We will continue to strengthen our organisational capability to deliver on acquisitions and organic growth across our portfolio. Continued investment into KFC brand innovation and technology remains important to effectively compete against our QSR peers and maximise shareholder returns,” he told the market.
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