Collins Foods Limited

FY26 revenue was $1.59 billion, up 8.6%, with underlying EBITDA of $244.5 million, up 6.3%, underlying EBIT of $130.7 million, up 10.1%, underlying NPAT of $61.4 million, up 13%, and underlying EPS of $0.52 per share versus $0.461 per share in the prior period. Statutory NPAT from continuing operations was $47.1 million versus $12.4 million in FY25; including Taco Bell, net NPAT was $60.1 million, up 17.6%. Cash flow remained strong, with net operating cash flow of $150.1 million, cash conversion of 94%, net debt reduced by $18.3 million to $119.6 million, and net leverage down to 0.77 from 0.93. The board declared a final dividend of $0.15 per share, taking the full-year fully franked dividend to $0.28 per share, up from $0.26. For FY27, management guided to about $35 million of capex for Kwench rollout in Australia, around $20 million capex in Germany, and around 7 to 10 new restaurants in Australia and approximately 7 in Germany; Andrew Leyden also referred to 2026 guidance for a margin of circa 5.5% and said raw material and FX pressures are built into that outlook.

Xavier Simonet said FY26 was a record year and framed the results as evidence of Collins Foods’ operational excellence, disciplined cost control, and KFC brand strength despite a challenging consumer backdrop. Strategically, he emphasized three pillars: sustainable growth in Australia, accelerated and profitable growth in Germany, and continued operational excellence across both regions. He also highlighted the Taco Bell exit as a cleanup of losses and obligations that lets the company focus more squarely on value creation through KFC.

Andrew Leyden emphasized the quality of the year’s cash generation and balance sheet improvement, pointing to $150.1 million of net operating cash flow, 94% cash conversion, and net leverage falling to 0.77. He also noted the margin drag from delivery fee-structure changes, value investment, and higher protein costs in Europe, while underlining that the board lifted the total dividend to $0.28 per share. On outlook, he said raw-material pressure is now the opposite of the prior tailwind, FX will be a stronger negative, regulatory costs are rising, and the 2026 margin guide is around 5.5%; he also said the company intends to keep a very strong balance sheet while prioritizing product and restaurant investment.

Analysts pressed management on the sharp slowdown in Europe late in FY26 and early FY27, asking whether it reflected competition, geography, delivery mix, or something structural. Management said the weakness was tied to short-term factors such as promotional timing, a change in menu items, logistics catch-up, the Middle East conflict’s impact on consumer confidence, higher fuel prices, and hot weather; they said they do not see a structural downward trend and remain focused on value, execution, and market-specific demand stimulation with Yum!. Questions on capital allocation and shareholder returns prompted management to say the first priority is product and core investment, with a very strong balance sheet maintained, but also with room for continued rollout and other growth investments rather than simply returning all free cash flow. Analysts also asked about the low investment ratio and local sourcing rules; management said Collins is efficient on entry tickets and CapEx without slowing brand investment, and that local content and supplier integration remain important but no immediate regulatory framework changes have occurred.