Collins Foods (ASX:CKF), which operates KFCs in Australia, has revealed its statutory profit after tax fell -88% to under $9 million – compared to $76M in FY24.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
But at the same time, the share price jumped over +25% to $9.12/sh in the first half hour of trades (albeit, on a volume of 543K shares for $4.7M).
Still – the share price action through Tuesday so far is, in a word, counterintuitive.
There are a few reasons why the Aussie stock could be heading up.
First, a number of brokers continue to rate the stock a buy. Secondly, the company clocked total Australian revenue of $1.51B; a new record for Collins. Thirdly, the company’s outlook was positive for FY25.
Perhaps the biggest signal was its 15.5cps dividend of last year was only slashed down to 15.0cps this year – which always gets a warm response from shareholders. The company declared $181.4M of cash flow at the start of FY26.
“We’re doubling down on growth with further investment in network expansion and modernisation in Australia, elevating the customer experience to support brand health, which is key to lifting sales,” Collins wrote of its plans for the year ahead. If that sounds delightfully vague, you’re not alone.
Still, the gulf between $1.5B revenue and $8.8M profit after tax is gargantuan.
But it appears that the dividend payment could be what’s really driven Australian traders’ attention away from NPAT and more to revenue.
The company also expects to increase its Netherlands performance through FY26, where much trouble has originated in recent history. In Collins’s words, a wave of anti-American sentiment has hurt the brand.
“KFC Europe revenue of $312.3 million was down slightly on the prior year,” Collins wrote.
More market news
Meet GeoGeorge: The HotCopper poster so accurate he got hired as an analyst
Trump’s call: ASX rockets on “total and complete” Israel-Iran ceasefire
“This reflected challenging market conditions driven by cost-of-living pressures, the war in Ukraine impacting costs, and the Middle East conflict impacting sentiment towards American brands, primarily in the Netherlands.”
(This HotCopper finance journalist was surprised to learn Collins did not address the fact that it has changed the flavour of the crumbing on its fillet burger, at least in some stores in Western Australia.)
CKF last traded at $9.12/sh.
Join the discussion: See what HotCopper users are saying about Collins Food and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please clickhere.