The Collins Foods Ltd (ASX: CKF) share price rose 2% today following the release of their 2019 financial year (FY19) profit result.
About Collins Foods
Collins Foods is a KFC and Taco Bell franchisee in Australia and KFC franchisee in the Netherlands and Germany. They also Sizzler restaurants in Australia and are the franchisor for Sizzler in Asia.
The Company’s mission is to “establish Collins Foods as a leading restaurant holding company, which operates premier brands where people love to eat and are proud to work.”
FY19 Result
Collins Foods looks to have delivered a healthy set of numbers with revenue up 16.9% to $901 million. This translated into an underlying net profit of $45 million. With strong net operating cash flow of $97 million, net debt is now down to $212 million.
The company announced a fully franked final dividend of 10.5 cents per share. This video from our Rask Finance website explains Franking Credits:
Looking under the hood and KFC Australia delivered a strong set of numbers for Collins Foods.
“Innovation and great value remain at the heart of KFC Australia,” CEO Graham Maxwell said. “Over FY19, KFC Australia performed strongly, with same-store sales growth of 3.7% underpinned by initiatives relating to delivery, digital and operations.”
Collins Foods is in the early stages of the rollout of Taco Bell stores with four currently trading in Queensland and another 10 expected to open by the end of the year.
Valuation
Collins Foods’ has around 116 million shares outstanding. At $7.70 per share Collins has a market capitalisation of just shy of $900 million. The shares are trading on 20 times FY19 profits per share and offer a fully franked dividend yield of 2.5%, with leverage sitting around 1.87 times.
Analyst consensus is for earnings/profit growth of 12% in FY20, which is expected to give a profit of around $50.5 million for the year. The consensus price target set by analysts is $7.70 — smack on where the shares are trading today.
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Disclosure: At the time of writing David does not hold a financial interest in any of the companies mentioned.