|Traded as||ASX: CKF |
S&P/ASX 300 Component
|Founded||13 August 1968Culver City, California, U.S. as Collins Foods Internationalin|
|Founder||James A. Collins|
|Headquarters||Level 3, KSD1, 485 Kingsford Smith Drive, Hamilton, Queensland, Australia|
Number of locations
|217 restaurants in Australia and 65 restaurants in Asia (As of Nov 2016)|
|Graham Maxwell (CEO & MD) |
Kevin Perkins (ED)
Number of employees
|9181 (Sep 2016)|
Collins Foods Limited (ASX: CKF) is a publicly-listed Australian company focused in restaurant operations. It is best known for operating restaurant chains KFC and Sizzler in Australia and parts of Asia. The company also owns Snag Stand, a fast casual restaurant chain founded in 2011 by businessperson Philip Blanco.
United States national, James Collins, founded Collins Foods International in 1968 after multiple meetings with Colonel Sanders and acquiring the Sizzler brand in 1967. Collins Foods International was a publicly traded company with more than 240 Sizzler and KFC stores in the United States and Australia.
In the 1980s the company's Sizzler business was struggling financially as popularity with the general public dipped. Sizzler appointed Thomas L. Gregory as president and CEO of the chain during this time. The Sizzler brand underwent changes in menu selection and customer experience, which proved to help bolster the brand's profitability. Based on these results, Collins Foods International expanded further into Asia in 1992.
Collins Foods International began selling off 209 United States- based KFC stores to PepsiCo in 1990. The sale was completed in 1991 for a total of US$123 million. The company was renamed as Sizzler International as efforts were increasingly focused on its Sizzler business.
In the mid-1990s Sizzler International was expanding aggressively in the Pacific region; however domestic sales began to return with losses. In 1996, after debts reached approximately US$100 million, the company filed for chapter 11 bankruptcy protection. After some major restructuring and paying approximately US$70 million to creditors claims, Sizzler International recovered from the bankruptcy.
In 2005 Worldwide Restaurant Concepts merged with Australian Equity investment firm, Pacific Equity Partners (PEP). PEP owned 52% of Worldwide Restaurant Concepts with the remaining 48% owned by company management. As a result, the company headquarters moved to Brisbane, Australia. After the merger it was renamed as Collins Foods.
In 2011 Sizzler USA acquired all Sizzler restaurants based in the United States. In the same year Pacific Equity Partners offered its share of Collins Foods to an IPO, ending PEP's ownership of the company.
In the 2013 financial year Collins Foods reported stalling revenue for their Sizzler operations in Australia, blaming the downturn of the casual dining sector in the country. By 2015 Collins Foods wrote down the value of Sizzler by AU$37.5 million. In an investors meeting by Collins Foods, CEO Graham Maxwell states: “We no longer consider Sizzler to be a strategic growth prospect in Australia and therefore we will not be investing further capital”. Collins Foods began to close a limited number of Sizzler restaurants in Australia, with greater focus directed to their KFC operations. Meanwhile, Sizzler operations in Asia continued to thrive, with further expansion plans in China.
In May 2016 Collins Foods further acquired 13 KFC restaurants in New South Wales and Victoria. Later in the year Collins Foods acquired the remaining 50% equity stake in Snag Stand, making the brand a wholly owned property.
As of November 2016 Collins Foods operates 190 KFC stores in Australia: 132 in Queensland, four in the Northern Territory, 41 in Western Australia and two in New South Wales. An additional 5 to 6 stores are planned for financial year 2017.
Moreover, Collins Foods operates 21 Sizzler restaurants in Australia, a decrease of two stores compared to financial year 2016. Collins Foods also operates 65 Sizzler restaurants in Asia, an increase of 5 stores compared to the previous financial year. An additional two stores in Asia are planned for financial year 2017.
Expansion into Germany
On 31 October 2016 Collins Foods announced that its German subsidiary, Collins Foods Germany, entered into a binding agreement to acquire 11 KFC restaurants in Stuttgart and Dusseldorf, Germany for AU$18.4 million or Euro €12.7 million. This occurred in the wake of KFC Germany's plans to increase its store count from 140 to 300 stores in the next few years. Completion of the acquisition is expected to occur in December 2016. In response to this announcement financial services firm Canaccord Genuity upgraded Collins Foods' estimated FY17 and FY18 EPS by 10% and 11%. Investment Services company Moelis puts the increased estimate in FY17 at 2%, noting the potentially slower growth of KFC restaurants in Australia.
Collins Foods plans to open four to five new KFC restaurants per year in Germany for financial years 2017 to 2018.
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