The broker describes Collins Foods' full-year result as solid, driven by continued acceleration in KFC Australia sales growth and strong cash conversion. Delivery is becoming an important growth driver and 20 more KFC outlets were added to aggregator platforms in the second half.
First-half results beat UBS estimates and KFC Australia impressed with operating earnings growth of 24%, supported by 14% growth in stores. An unusually hot summer in Europe affected sales, down -2.5%.
The company has acquired 11 KFC stores in Germany. Deutsche Bank considers this to be minor positive given the accretive nature of the deal and potential for further opportunities in a new growth market.