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Collins Foods Limited (AU:CKF)
ASX:CKF

Collins Foods (CKF) AI Stock Analysis

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AU:CKF

Collins Foods

(Sydney:CKF)

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Neutral 69 (OpenAI - 5.2)
Rating:69Neutral
Price Target:
AU$10.50
▼(-2.23% Downside)
Action:ReiteratedDate:12/02/25
Collins Foods' strong earnings performance and positive technical indicators are offset by high valuation concerns and operational challenges. The company's ability to manage debt and improve operational efficiency will be crucial for future performance.
Positive Factors
Revenue Growth and Scale
The company delivered its highest first-half revenue with a 6.6% increase to $750.3m, reflecting durable demand across its restaurant network. Persistent top-line growth at scale supports reinvestment in stores, digital channels and product trials, strengthening long-term competitive positioning.
Cash Generation and Net Debt Reduction
Strong operating cash flow and positive free cash flow growth funded a $20m net debt reduction to $138.9m while supporting capex and dividends. Durable cash generation improves financial flexibility to fund network expansion, digital investment and weather cost cycles without relying solely on external financing.
Operational Execution and Margin Improvement
Same-store sales growth and a near-1000bp uplift in EBITDA performance (9.4%) with margins +80bps in KFC Australia indicate durable operational improvements. Ongoing digital investment and product innovation (e.g., Kwench trial) underpin sustainable unit economics and margin resilience across the core business.
Negative Factors
Rising Leverage Risk
Although recent cash generation reduced net debt, the balance sheet note on rising debt-to-equity highlights structural leverage risk. Elevated debt can constrain strategic flexibility, increase interest cost sensitivity and limit capacity for acquisitions or accelerated roll-out if profitability softens.
Commodity and Labor Inflation Pressure
Management expects renewed poultry and ongoing labor inflation, and avian flu has driven European poultry cost spikes. These structural input cost pressures can persistently compress margins since consumer price pass-through is limited in QSR, making margin recovery contingent on sustained operating gains.
Execution and Compliance Risks in Regions/Brands
Weak European performance (Netherlands SSS +0.4%) and a 3.9% decline at Taco Bell Australia signal regional and brand execution headwinds. Coupled with a $1.3m provision for potential wage underpayments, these issues point to operational execution and compliance risks that can erode growth and raise remediation costs over time.

Collins Foods (CKF) vs. iShares MSCI Australia ETF (EWA)

Collins Foods Business Overview & Revenue Model

Company DescriptionCollins Foods Limited (CKF) is a prominent Australian company specializing in the quick-service restaurant sector. The company operates primarily as a franchisee of KFC in Australia and has expanded its portfolio to include other restaurant brands. CKF focuses on delivering quality food and exceptional customer service while maintaining operational efficiency across its restaurant operations. Its core offerings include fried chicken, burgers, and other fast-food items, catering to a diverse customer base across various locations.
How the Company Makes MoneyCollins Foods makes money primarily by operating franchised QSR restaurants and recognising sales revenue from food and beverage transactions made to customers in its stores and through digital/delivery channels. The largest revenue stream is restaurant sales from its KFC network, where earnings are driven by customer traffic and average transaction value across company-operated sites. A smaller (and historically developing) revenue stream has come from operating Taco Bell restaurants in Australia, generating revenue in the same way (direct-to-customer restaurant sales). As a franchisee, Collins Foods’ store-level profitability is influenced by franchise arrangements with the brand owner (Yum! Brands for KFC and Taco Bell) under which it typically pays ongoing fees (e.g., royalties and marketing contributions) and must comply with operating and brand standards; these payments affect margins rather than being separate revenue sources. Additional contributors to earnings commonly include delivery and digital ordering (which can expand reach and sales mix) and network growth through opening new restaurants or acquiring existing restaurants to increase the number of revenue-generating locations. Specific fee rates, unit economics, or the exact contribution split by brand are null.

Collins Foods Earnings Call Summary

Earnings Call Date:Dec 01, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Jun 30, 2026
Earnings Call Sentiment Neutral
The earnings call presented a strong overall performance with record revenue and significant growth in key financial metrics, underpinned by operational excellence and sustainability achievements. However, challenges in Europe, especially the Netherlands, and issues like potential wage underpayments and anticipated cost pressures pose concerns.
Q2-2026 Updates
Positive Updates
Record Revenue and Growth
Collins Foods achieved the highest first half-year revenue in the company's history, up 6.6% compared to last year. Underlying EBITDA grew by 11%, and underlying NPAT increased by 29.5%.
Debt Reduction and Strong Cash Flow
The company reduced net debt by $20 million to $138.9 million, driven by strong cash flows which also funded capital investment, dividend payments, and debt reduction.
Operational Excellence and Margin Improvement
KFC Australia experienced a 2.3% same-store sales growth, with EBITDA up 9.4% and margins up 80 basis points. The focus on operational improvements and digital investments contributed to these results.
Sustainability Achievements
Collins Foods achieved an 8% reduction in food waste in Australia and 25% in Europe, and installed its largest solar installation in Germany.
Negative Updates
Challenges in Europe
The Netherlands experienced cost of living pressures with only a 0.4% same-store sales increase, and avian flu-related poultry cost inflation held back margin improvements.
Taco Bell Australia Revenue Decline
Taco Bell Australia saw a 3.9% revenue decline due to a weaker consumer environment, with discussions on the transition to new ownership still in progress.
Potential Wage Underpayments
Collins Foods provided a $1.3 million provision for potential wage underpayments relating to prior years, indicating ongoing compliance challenges.
Commodity and Labor Cost Inflation Concerns
The company anticipates a return to cost inflation for key commodities such as poultry and continues to face labor inflation, impacting future margins.
Company Guidance
During the Collins Foods Limited HY '26 Results Conference Call, CEO Xavier Simonet highlighted the company's record performance with a 6.6% increase in revenue to $750.3 million. This growth was attributed to strong operational execution and product innovation, particularly in KFC Australia, which saw same-store sales increase by 2.3%. The company's underlying EBITDA rose by 11% to $113.9 million, while underlying NPAT increased by 29.5%. The return on equity improved by 190 basis points to 14.1%. Despite challenging consumer environments, Collins Foods announced a favorable upgrade to its full-year outlook, targeting NPAT growth in the mid- to high teens. The company declared a fully franked interim dividend of $0.13 per share. Operational excellence remained a key focus, with ongoing investments in digital channels and new product launches, such as the Kwench beverage line trialed in Cairns.

Collins Foods Financial Statement Overview

Summary
Collins Foods shows strong revenue growth and cash flow management, but faces challenges with profitability and rising debt levels. Operational efficiency and leverage management are key areas for improvement.
Income Statement
65
Positive
Collins Foods has shown a strong revenue growth trend over the past few years, but recent profitability metrics such as EBIT and net profit margins have weakened, likely impacting overall profitability. The gross profit margin remains strong, indicating efficient cost management, yet the declining EBIT margin suggests challenges in operational efficiency.
Balance Sheet
60
Neutral
The company has maintained a stable equity base, but the rising debt levels have increased the debt-to-equity ratio, posing potential financial risks. The equity ratio is fair, but the high leverage could impact financial stability if not managed carefully.
Cash Flow
70
Positive
Collins Foods has demonstrated strong operating cash flow, which is a positive indicator of cash-generating ability relative to net income. Free cash flow growth has been positive, supporting potential for reinvestment and shareholder returns, despite some fluctuations in capital expenditures.
BreakdownTTMApr 2024Apr 2023Apr 2022Apr 2021Apr 2020
Income Statement
Total Revenue1.57B1.52B1.49B1.35B1.18B1.07B
Gross Profit806.87M776.42M750.95M676.27M619.34M559.91M
EBITDA132.90M186.24M227.85M146.26M203.99M174.32M
Net Income11.90M8.83M76.72M12.75M54.80M32.95M
Balance Sheet
Total Assets1.47B1.48B1.42B1.54B1.41B1.27B
Cash, Cash Equivalents and Short-Term Investments101.61M119.12M83.82M80.24M97.22M95.72M
Total Debt1.47B890.83M834.54M843.37M748.38M669.30M
Total Liabilities1.05B1.08B991.78M1.16B889.44M790.87M
Stockholders Equity417.18M405.32M426.44M384.50M393.53M362.60M
Cash Flow
Free Cash Flow119.15M115.69M93.64M70.59M83.12M81.35M
Operating Cash Flow173.81M181.44M176.39M146.22M156.33M128.25M
Investing Cash Flow-59.91M-67.91M-53.55M-93.54M-97.31M-50.92M
Financing Cash Flow-100.69M-77.97M-118.90M-65.94M-61.95M-93.03M

Collins Foods Technical Analysis

Technical Analysis Sentiment
Negative
Last Price10.74
Price Trends
50DMA
10.25
Negative
100DMA
10.47
Negative
200DMA
9.97
Negative
Market Momentum
MACD
-0.12
Negative
RSI
40.54
Neutral
STOCH
27.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CKF, the sentiment is Negative. The current price of 10.74 is above the 20-day moving average (MA) of 9.71, above the 50-day MA of 10.25, and above the 200-day MA of 9.97, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 40.54 is Neutral, neither overbought nor oversold. The STOCH value of 27.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:CKF.

Collins Foods Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
AU$1.12B11.612.89%2.67%4.61%-76.47%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
58
Neutral
AU$255.19M-101.48-4.58%13.54%66.33%
56
Neutral
AU$1.63B12.128.83%3.58%-3.09%-104.37%
50
Neutral
AU$1.77B52.004.82%0.56%27.40%
48
Neutral
$63.12M11.71-10.34%10.13%-353.94%
46
Neutral
AU$3.79M1.09-6.32%-9.62%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:CKF
Collins Foods
9.48
1.28
15.61%
AU:DMP
Domino's Pizza Enterprises Limited
17.24
-8.67
-33.46%
AU:RFG
Retail Food Group
1.00
-1.00
-50.00%
AU:OLI
Oliver's Real Food Ltd.
0.01
0.00
0.00%
AU:AMA
Ama Group Limited
0.53
-0.03
-5.36%
AU:GYG
Guzman y Gomez Ltd.
17.29
-16.25
-48.45%

Collins Foods Corporate Events

Collins Foods Moves to Settle Employee Rest-Break Class Action for Up to $9m
Mar 12, 2026

Collins Foods Limited has agreed to a binding Heads of Agreement to settle a class action over 10-minute rest breaks launched in December 2023, with its share of the multi-party settlement capped at up to AUD 9 million, subject to Federal Court approval. The settlement includes a cap-and-collar mechanism tied to the number of employees registering, allows Collins Foods and other respondents to reduce payments if participation is lower than expected or terminate or increase payments if higher, involves no admission of liability, and reinforces the company’s stated commitment to workplace law compliance and staff support.

The outcome, if approved, would remove a significant legal overhang related to employee entitlements while introducing some residual financial variability depending on final claimant numbers. It may provide greater clarity for investors on potential exposure from the rest-break litigation, although the confidential terms and possible adjustment of the settlement amount mean the ultimate cost impact for Collins Foods and co-respondents is not yet fully fixed.

The most recent analyst rating on (AU:CKF) stock is a Hold with a A$10.00 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Flags Strategic Update on European Operations
Mar 11, 2026

Collins Foods Limited has released an update on its European operations, presented by its CEO, CFO, and General Manager Europe in March 2026. The announcement signals a formal briefing on recent developments and trading conditions in its European business, suggesting a strategic focus on the region’s performance and operational trends that may influence future decisions for investors and other stakeholders.

The most recent analyst rating on (AU:CKF) stock is a Hold with a A$10.00 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods accelerates German KFC rollout and refocuses Dutch operations
Mar 11, 2026

Collins Foods is accelerating its European growth strategy by signing an asset purchase agreement to acquire eight KFC restaurants in Bavaria, centred on Munich, and expanding its German development agreements to target 45 to 90 new outlets over four years in Bavaria, North Rhine-Westphalia and Baden-Württemberg. The move materially increases its German scale, strengthens its presence in some of the country’s wealthiest and most populous states, and is backed by KFC parent Yum! Brands, which has granted conditional exclusivity and sees Collins Foods as a key partner in building out the German network.

In the Netherlands, Collins Foods has extended and refocused its corporate franchise agreement with Yum! Brands to 2029, handing back marketing responsibilities from 2027 so it can concentrate on restaurant operations and profitability, with the changes not expected to materially affect earnings. A trading update shows continued total sales growth, with momentum in Australia and Germany and modest growth but softer same-store sales in the Netherlands, and the company reaffirmed its guidance for mid-to-high teens growth in full-year underlying net profit after tax.

The most recent analyst rating on (AU:CKF) stock is a Hold with a A$10.00 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Reports Lapse of Employee Equity Rights, Adjusting Issued Capital Profile
Mar 3, 2026

Collins Foods has notified the market of the cessation of certain equity-based incentive securities, following the lapse of conditional rights that could not be satisfied. A total of 6,401 performance rights and 17,472 ownership share plan rights have lapsed as of 2 March 2026, slightly reducing potential future dilution from these employee-related securities and updating investors on changes to the company’s issued capital profile.

The most recent analyst rating on (AU:CKF) stock is a Hold with a A$11.00 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Issues Unquoted Shares Under Employee Ownership Plan
Mar 3, 2026

Collins Foods Limited has notified the market of the issue of 136 unquoted securities under its Ownership Share Plan Rights, effective 22 January 2026. The new securities, issued under an employee incentive scheme and not intended to be quoted on the ASX, highlight the company’s ongoing use of equity-based compensation to align staff interests with long-term shareholder value.

The issuance reflects Collins Foods’ continued reliance on share-based incentives as part of its remuneration framework. While modest in size, the grant underscores the company’s strategy to reward and retain employees through participation in its equity, which can support operational stability and stakeholder alignment over time.

The most recent analyst rating on (AU:CKF) stock is a Hold with a A$11.00 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Director Nicki Anderson Increases Indirect Shareholding via DRP
Jan 6, 2026

Collins Foods Limited has disclosed a minor change in the indirect shareholding of non-executive director Nicki Anderson, reflecting routine participation in the company’s dividend reinvestment plan. Through the Meyer-Anderson Superannuation Fund, Anderson acquired 102 ordinary fully paid shares at $10.42 each on 5 January 2026, increasing her indirect holding from 8,192 to 8,294 shares, with the trade occurring outside a closed period and requiring no special clearance, indicating an incremental reinforcement of director alignment with shareholder interests rather than a strategic shift in ownership.

The most recent analyst rating on (AU:CKF) stock is a Buy with a A$12.30 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Director Increases Indirect Shareholding via Dividend Reinvestment
Jan 6, 2026

Collins Foods Limited has disclosed a minor change in the shareholding of non-executive director Christine Francis Holman, who increased her indirect interest in the company through the Holman Superfund via the dividend reinvestment plan. Following the issue of 341 ordinary fully paid shares at $10.42 per share on 5 January 2026, Holman’s total indirect holding rose to 27,724 shares, signalling routine reinvestment activity rather than a strategic shift, with no trading during a closed period and no related changes in contractual interests reported.

The most recent analyst rating on (AU:CKF) stock is a Buy with a A$12.30 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Seeks ASX Quotation for New Dividend Plan Shares
Jan 5, 2026

Collins Foods Limited has applied to the ASX for quotation of 116,691 new fully paid ordinary shares, issued on 5 January 2026 under a dividend or distribution plan. The relatively small share issue forms part of the company’s routine capital management and shareholder reward mechanisms, marginally increasing the number of shares on issue while reinforcing its practice of offering equity-based participation to investors.

The most recent analyst rating on (AU:CKF) stock is a Buy with a A$12.30 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Collins Foods Confirms DRP Pricing for Interim Dividend
Dec 29, 2025

Collins Foods Limited has updated its earlier dividend notification for holders of its ordinary fully paid shares, confirming that the dividend reinvestment plan (DRP) price is now available for the interim distribution relating to the six‑month period ended 12 October 2025. The update, lodged with the ASX on 30 December 2025, refines details originally announced on 3 December 2025 and applies to investors on the record as of 8 December 2025, providing greater clarity for shareholders choosing to reinvest their dividends and underscoring the company’s ongoing use of equity-based funding to support its capital management strategy.

The most recent analyst rating on (AU:CKF) stock is a Buy with a A$12.30 price target. To see the full list of analyst forecasts on Collins Foods stock, see the AU:CKF Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 02, 2025