Collins Foods Limited

FY26 revenue was a record $1.59 billion, up 8.6% year over year; underlying EBITDA was $244.5 million, up 6.3%; underlying EBIT was $130.7 million, up 10.1%; underlying NPAT was $61.4 million, up 13%; and underlying EPS was $0.52 per share versus $0.461 last year. Statutory NPAT from continuing operations was $47.1 million versus $12.4 million in FY25. On a basis including Taco Bell, net NPAT was $60.1 million, up 17.6%, in line with guidance midpoint. Cash flow remained strong with net operating cash flow of $150.1 million, net debt down $18.3 million to $119.6 million, and net leverage down to 0.77 from 0.93. The final dividend was $0.15 per share, taking the FY26 fully franked dividend to $0.28 per share versus $0.26 last year. For FY27, management guided to about $35 million of capex for Kwench rollout in Australia, about $20 million capex for Germany, about 7 to 10 new restaurants in Australia, approximately 7 new restaurants in Germany, and about 80% Kwench rollout by April. Management also said FY27 guidance implies circa 5.5% operating margin, with Europe facing weaker early trading and Australia up 6.7% total sales and 4% same-store sales in the first 8 weeks of FY27.

Xavier Simonet framed FY26 as a record year and said the results showed the strength of the KFC brand, operational execution and disciplined cost control despite a challenging consumer backdrop. He emphasized three strategic priorities: sustainable growth in Australia, accelerating Germany as a second growth pillar, and continued operational excellence across both regions. His tone was confident but measured, repeatedly pointing to long-term value creation, tighter capital allocation and further investment in growth concepts such as Kwench, late night and breakfast.

Andrew Leyden highlighted the financial quality of the year: underlying EBITDA of $244.5 million, underlying NPAT of $61.4 million, statutory NPAT from continuing operations of $47.1 million, and net operating cash flow of $150.1 million. He said margins were slightly lower by 34 basis points because of delivery fee-structure changes, value investment and higher protein costs in Europe, while underlying EBIT margins improved to 8.2%. He also pointed to balance-sheet strength, with net debt down to $119.6 million, leverage at 0.77, ROE at 14.5%, cash balances of $94 million, and a record total dividend of $0.28 per share. In guidance, he flagged stronger FX pressure, commodity and regulatory costs, continued digital and international growth, stable fixed costs, and maintained that capital allocation will prioritize product and core-business investment first.

Analysts focused on the sharp slowdown in Europe, capital allocation, dividend growth, raw-material and margin assumptions, and whether competitive pressure had worsened. Management said the European deceleration was not structural, citing changes in promotions, menu cycles, logistics catch-up and a tough comparison to prior-year collaborations; they also said they are prioritizing value over volume rather than chasing short-term price cuts. On capital allocation, management said the balance sheet is strong, dividends should grow progressively in absolute terms, and excess cash will still be used for restaurant rollouts, technology and growth investments rather than simply returned. On cost and margin questions, management said the FY27 outlook already assumes raw-material pressures, weaker price-mix/enrichment, and no assumption that price-mix will fully offset costs this year.