Collins Foods : Appendix 4D and Interim Financial Report

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COLLINS FOODS LIMITED ACN 151 420 781

INTERIM FINANCIAL REPORT

For the reporting period ended 17 October 2021

Authorised for release by the Board

For personal use only

THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY

Collins Foods Limited ACN 151 420 781 | Interim Financial Report - for the reporting period ended 17 October 2021

APPENDIX 4D

For personal use only

Half-year Financial Report

for the Financial Half-year ended 17 October 2021

Reporting period:	24 weeks to 17 October 2021
Previous corresponding period:	24 weeks to 18 October 2020

RESULTS FOR ANNOUNCEMENT TO THE MARKET

REVENUE AND NET PROFIT

	Percentage	Period ended	Period ended
	Change	17 Oct 2021	18 Oct 2020 (1)
	%	$000	$000
Revenue from ordinary activities	Up 8.5%	534,246	492,271
Profit from ordinary activities after tax attributable to members	Up 26.1%	26,392	20,923
Loss from discontinued operations after tax	Down 100.0%	-	(4,446)
Net profit for the period attributable to members	Up 60.2%	26,392	16,477

1. Comparative figures have been restated to reclassify Sizzler Australia out of ordinary activities and into discontinued operations. Further details of this can be found in note E of the Interim Financial Report

BRIEF EXPLANATION OF THE FIGURES REPORTED ABOVE

This report is based on the consolidated interim financial statements which have been reviewed by the auditor. The review report, which was unqualified, is included within the Company's Interim Financial Report for the 24 weeks ending 17 October 2021 which accompanies this Appendix 4D.

For a brief explanation of the figures above please refer to the Results Announcement for the period ended 17 October 2021 and the Director's Report, which forms part of the Interim Financial Report.

DIVIDENDS

	Amount per	Franked amount
	Security	per security
Interim dividend for reporting period:	12.0 cents	12.0 cents

• Payable 22 December 2021

The record date for determining entitlements to the interim dividend:

• 7 December 2021

Interim dividend for previous corresponding period (18 October 2020)	10.5 cents	10.5 cents
•	Paid 18 December 2020
Final dividend at year end (2 May 2021)	12.5 cents	12.5 cents
•	Paid 22 July 2021

The interim fully franked dividend of 12.0 cents per share was declared by the Board of Directors on 30 November 2021. In accordance with accounting standards, as the dividend was not declared prior to the reporting period end, no provision has been taken up for this dividend in the financial statements for the reporting period ended 17 October 2021.

NET TANGIBLE ASSETS PER SECURITY

	Current Reporting	Previous Corresponding
	Period	Period (1)
Net tangible asset backing per ordinary security	$(0.40)	$(0.46)

1. Comparative figures have been restated to due to an adjustment to the accounting for acquisitions in prior period. Refer to note A3(B) for further details.

DETAILS OF ASSOCIATES

Joint venture entities and the percentage holding thereof are as follows:

Entity	Percentage Holding
Sizzler China Pte Ltd	50%

Collins Foods Limited ACN 151 420 781 | Appendix 4D - Interim Financial Report - for the reporting period ended 17 October 2021

For personal use only

CONTENTS
Directors' Report.........................................................................................................................................................................................	1
Auditor's independence declaration......................................................................................................................................................	3
Consolidated Income Statement.............................................................................................................................................................	4
Consolidated Statement of Comprehensive Income............................................................................................................................	5
Consolidated Balance Sheet....................................................................................................................................................................	6
Consolidated Statement of Cash Flows ..................................................................................................................................................	7
Consolidated Statement of Changes in Equity ......................................................................................................................................	8
Notes to the Consolidated Financial Statements...................................................................................................................................	9
A/ Financial overview ................................................................................................................................................................................	9
A1/ Segment information ................................................................................................................................................................	9
A2/ Revenue ...................................................................................................................................................................................	11
A3/ Business combinations ............................................................................................................................................................	12
B/ Cash management .............................................................................................................................................................................	15
B1/ Borrowings.................................................................................................................................................................................	15
B2/ Dividends ..................................................................................................................................................................................	15
C/ Recognised fair value measurements..............................................................................................................................................	16
D/ Contributed equity..............................................................................................................................................................................	17
E/ Discontinued operations .....................................................................................................................................................................	18
F/ Other information.................................................................................................................................................................................	19
F1/ Property, plant and equipment..............................................................................................................................................	19
F2/ Intangible assets .......................................................................................................................................................................	20
F3/ Income tax ................................................................................................................................................................................	22
F4/ Commitments ...........................................................................................................................................................................	23
G/ Basis of preparation of half-year report ...........................................................................................................................................	24
G1/ Basis of preparation of half-year report ...............................................................................................................................	24
G2/ Changes in accounting policies ...........................................................................................................................................	24
Directors' Declaration ..............................................................................................................................................................................	26
Independent Auditor's Review Report ..................................................................................................................................................	27

Collins Foods Limited ACN 151 420 781 | Interim Financial Report - for the reporting period ended 17 October 2021

For personal use only

DIRECTORS' REPORT

Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Collins Foods Limited (the Company) and the entities it controlled at the end of, or during the twenty-four week period ended 17 October 2021, which the Directors consider to be the first half (half-year) of the Group's financial year to 1 May 2022.

Directors

The following persons were Directors of the Company during the half-year or up to the date of this report:

Name	Date of appointment
Robert Kaye SC	7 October 2014
Christine Holman	12 December 2019
Newman Manion (1)	10 June 2011
Bronwyn Morris AM	10 June 2011
Drew O'Malley	29 June 2021
Kevin Perkins	15 July 2011
Russell Tate	10 June 2011

(1) (Newman Manion retired from the Board of Directors on 27 August 2021.

Operating and financial review

GROUP OVERVIEW

The Group's business is the operation, management and administration of restaurants, currently comprising three restaurant brands: KFC, Taco Bell and Sizzler. The KFC and Taco Bell brands are two of the world's largest restaurant chains and are owned globally by Yum!. In Australia, the Group is the largest franchisee of KFC restaurants.

At the end of the period, the Group operated 254 franchised KFC restaurants in Australia, 16 franchised KFC restaurants in Germany, 35 franchised restaurants in the Netherlands and 17 franchised Taco Bell restaurants in Australia, which all compete in the quick service restaurant market. The Group is also a franchisor of the Sizzler brand in South East Asia, with 64 franchised restaurants in Thailand and Japan.

During the half-year period to 17 October 2021, COVID-19 continued to have an impact on the operations and financial performance of our business, in particular in-line Taco Bell restaurants in Victoria, KFC Australia foodcourts, and KFC Europe inline restaurants. The Group has worked closely with various authorities and our franchisor, Yum! Brands to ensure we implemented all measures to safeguard our employees and customers at each and every stage.

REVENUE AND EXPENSES

Revenues for the half-year were $534.2 million, up 8.5% compared to the previous corresponding period. Compared to the previous corresponding period, revenues in the domestic KFC restaurants segment were $433.7 million, up 4.4%, revenues in the Europe KFC restaurants segment were $84.7 million, up 31.7% and Taco Bell revenues were $14.8 million, up 33.0%.

The growth in total revenues combined with disciplined business controls resulted in an underlying EBITDA, post AASB 16, for the half-year of $94.9 million, up 13.1% compared to the previous corresponding period.

NET PROFIT

The statutory profit from continuing operations was $26.4 million for the half-year. This was an increase of $5.5 million, predominantly driven by revenue growth. This represents basic earnings from continuing operations per share of 22.62 cents compared to the previous corresponding period basic earnings per share of 17.94 cents.

CASH FLOW AND BALANCE SHEET

The net cash flow from operations reflected in the statutory Consolidated Statement of Cash Flows (including AASB 16) of $72.3 million is $5.9 million lower than the prior comparable period.

Cash flow from investing activities was a net outflow of $52.2 million reflecting investment in the existing network and the building of new restaurants and acquisitions in the Netherlands.

Statutory cash flow from financing activities was a net outflow of $26.5 million representing inflows of $14.1 million to fund the Netherlands acquisitions, outflows related to leases and the Group's dividend payment.

Overall cash and cash equivalents as at 17 October 2021 was $90.0 million, representing a $5.7 million decrease on the prior reporting period.

Collins Foods Limited ACN 151 420 781 | Interim Financial Report - for the reporting period ended 17 October 2021

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