Ann: FY24 Results - ASX Release, page-5

I've just had a read through the releases and also listened into the briefing and wanted to share my overall thoughts on particular things that stood out to me

Collins Foods has a long term habit of surprising the market on the upside and I think this result was overall very good in a difficult market.

The same store sales growth across all three units were better than I expected (KFC Australia up 3.8% Europe up 4.9% and Taco Bell up 3.5%) and margins were actually a bit better than previous financial year (management explained this as happening due to find efficiencies in energy, labour and the production line).

I actually thought this might be the result where Taco Bell gets written off officially so it was nice to hear some cautious optimism on it's future. The roll out is going to remain paused but apparently the Victorian stores in particular have been performing really well.

The same store sales trading for the first 7 weeks of the current financial year has been more challenging with KFC Australia up slightly, Europe down slightly and Taco Bell up slightly.

In terms of costs it seems that commodities are a bit more stable than they have been (it was mentioned that Europe is actually now cheaper than Australia for buying chicken etc.) and the real hits going to come from wages and energy.

A point that I thought was quite relevant was that it's very important longer term for KFC to maintain it's reputation as an affordable option for young families and this will sometimes require copping a short term margin squeeze which I agree with.

These guys are actually extremely bullish on acquisitions which will be focused on the KFC brand. I got the sense that something might actually be imminent in Europe whereas in Australia it's likely to be more opportunistic on a smaller scale. This take was the biggest change in tone I've picked up on from previous presentations.

Overall I thought management were really impressive and pragmatic on the call. I admire Kevin Perkins stepping back in at a difficult time for the company and if he was younger I would have liked to have seen him stay in the role as it's always great to have a manager with a big personal shareholding.