Annual Report 2015
Total Page:16
File Type:pdf, Size:1020Kb
COLLINS FOODS LIMITED ANNUAL REPORT 2015 COLLINS FOODS LIMITED ABN 13 151 420 781 2015 has delivered a strong financial result, and we are well-placed to continue to maximise growth opportunities. Contents 3 Our financial performance 5 Our year in review 6 Chairman’s message 7 CEO’s report 9 Corporate Governance Statement 15 Directors’ Report 34 Auditor’s Independence Declaration 35 Consolidated Balance Sheet Key dates for 2015-2016 36 Consolidated Income Statement Thursday, 25 June 2015 Full year results released 37 Consolidated Statement of Comprehensive Income Thursday, 9 July 2015 Final dividend record date 38 Consolidated Statement of Changes in Equity Thursday, 23 July 2015 Final dividend payment date 39 Consolidated Statement of Cash Flows Tuesday, 1 September 2015 2015 Annual General Meeting 40 Notes to the Consolidated Financial Statements Sunday, 18 October 2015 FY16 half-year end 84 Directors’ Declaration Wednesday, 2 December 2015 Half-year results released 85 Independent Auditor’s Report Thursday, 10 December 2015 Interim dividend record date 87 Shareholder Information Tuesday, 15 December 2015 Interim dividend payment date 89 Corporate Directory Sunday, 1 May 2016 End of FY16 2 Collins Foods Limited Annual Report 2015 Our financial performance Over the past 12 months Collins Foods Limited has been firmly focused on growing its core business. 600 25 25 Revenue Underlying NPAT Revenue (A$ million) Statuatory NPAT ($ million) (A$ million) (A$ million) 500 20 20 571.6 24.6 400 15 15 423.9 425.1 17.9 16.4 300 10 10 200 34.4% 5 5 100 37.4% Revenue was up 34.4% on an underlying basis Underlying NPAT was compared to the previous0 up 37.4% to $24.6m 0 0 FY13 FY14 FY15 corresponding period.(a) FY13 FY14 FY15 (FY14: $17.9m).(a) 4.8% Ô to $(10.4)m KFC Same Store Sales Statutory NPAT Same store sales up, to 4.8% Statutory NPAT loss of $10.4m was heavily (FY14: 0.8%). impacted by a $37.5m non-cash, pre-tax impairment charge on Sizzler Australia. 37.5% 9.5% EBITDA Dividends Underlying Earnings Before Interest, Total FY15 fully franked dividends Tax, Depreciation and Amortisation up, paid up, to 11.5 cps (FY14: 10.5 cps). to $67.4m (FY14: $49.0m).(a) 9.4% 2.5 points Net operating cashflow ROCE Net operating cashflow up, Return on Capital Employed to $49.1m (FY14: $44.9m). up 2.5 points to 12.9% (FY14: 10.4%). (a) Adjusted to exclude impact of WA/NT acquisition, non-cash impairments and other significant items in FY14. FY15 includes an additional trading week (53 week year). Collins Foods Limited Annual Report 2015 3 Japan Sizzler (9) China Sizzler (9) Collins Foods Strives to build the best restaurant company in the world. Thailand Sizzler (42) Queensland Northern Territory KFC (127) KFC (4) Sizzler (18) Western Australia KFC (38) Sizzler (5) New South Wales KFC (2) Sizzler (3) We are proud to have opened six new KFC restaurants during the year, bringing the total number of all our restaurants in Australia to 197. 4 Collins Foods Limited Annual Report 2015 Our year in review Our strengthened focus on driving sales with innovative products and maximising operations performance has been key to meeting the challenges of an evolving market. ´ We invested in new restaurant developments and major remodels to provide customers a contemporary restaurant design for an enhanced dining experience – Built six new restaurants KFC achieved solid growth as – Nine major remodels in Queensland and seven in Western Australia a result of good sales growth – Eight minor remodels across the network underpinned by innovative products, ´ Customers responded to a very successful summer disciplined cost management and cricket marketing campaign the strong performance of recent ´ Product innovation was key in driving sales growth across the KFC business new restaurant acquisitions. Based on performance, Sizzler has been We are excited about this innovative business determined as non-core to Collins Foods concept which is demonstrating great strategic growth. growth potential. ´ Sizzler Australia continues to generate positive EBITDA ´ Two new Snag Stands opened in 2015 – Macquarie ´ We are proceeding with our plans to extend our Centre and Sunshine Plaza footprint in Asia in the coming year ´ Customers are responding to the Stands’ new format ´ One new Snag Stand to open in Pacific Fair in late 2015 Collins Foods Limited Annual Report 2015 5 Chairman’s message Collins Foods Limited has delivered a very encouraging financial performance in 2015. This is a result of our disciplined approach to core business growth and our unwavering focus on driving efficiencies across the business. Overall, we achieved a 29.7% increase in revenue across the Collins Foods’ strong 2015 performance was delivered during a business, driven by solid same store sales and new restaurant year in which there were also a number of significant changes openings within the KFC business, and better-than-expected to the Board and management team. performance of the recently acquired Western Australia In March 2015, Russell Tate stepped down from the role of and Northern Territory KFC restaurants. Good cost controls Chairman after leading the Board since the Company’s listing enabled us to translate this revenue growth into strong EBITDA in 2011. I thank Russell for his excellent stewardship up to growth of 33.5%. this time. I am pleased that Russell remains on the Board as Further, a $5.2m reduction in net debt to $122.8m in 2015 an Independent Non-executive Director, a member of the reaffirms our approach to steady business growth while Board’s Audit and Risk Committee and the Remuneration maintaining a strong balance sheet and reducing debt. and Nomination Committee, ensuring his extensive Company experience is retained. Our focus on innovation benefited the KFC business in particular, and has been key to meeting the challenges of The Company’s management will continue under the leadership a continually evolving market in which there is increased of Graham Maxwell as Managing Director & CEO. We welcomed competition, subdued retail demand and rising costs. Graham as CEO following the resignation of Kevin Perkins in September 2014. Graham was also appointed Managing Director We achieved stronger sales by enhancing our existing network of in March 2015. KFC restaurants, implementing attractive and innovative product offerings, and running a successful summer marketing campaign. Kevin Perkins has a 35 year history with Collins Foods – Operational consistency, particularly in the areas of labour and 29 years as Managing Director & CEO – and he remains waste cost control and efficiency gains, further supported this actively involved in the Company as an Executive Director. performance and we will continue to review the potential for During his leadership, Kevin played an integral role in this model to be applied across all Collins Foods brands. strengthening the Company for sustained growth. I would like to take this opportunity to sincerely thank Kevin on behalf We will pursue all opportunities to build the KFC business of the Board, for his outstanding commitment over three in the coming year by opening new restaurants and decades, and his ongoing dedication to seeing Collins Foods enhancing our existing network with progressive major reach its full potential. I also thank and commend Graham remodels to ensure customers continue to receive an Maxwell for the expertise and commitment he brings to Collins enhanced dining experience. Foods and for his work to ensure a seamless leadership change The momentum and performance of our KFC business offset during the period. disappointing results from Sizzler Australia which, despite Thanks must also go to all of our staff for their commitment to initially responding to the ‘Get Refreshed’ campaign and front- strengthening our business for the future and I look forward to of-house remodelling across some restaurants, reported a working with Graham and his team as he continues to inspire a disappointing 8.5% decline in same store sales across the year. growing staff of more than 8,700 Australia wide, to deliver on Sizzler Asia continued to contribute steady earnings growth. the Company’s growth strategy, underpinning strengthened After the key summer trading period we undertook a strategic earnings growth and shareholder value. review of the Sizzler Australia business and, as a result, In closing, thank you also to directors Newman Manion the brand will no longer be considered core to the strategic and Bronwyn Morris for their professionalism and dedication growth of Collins Foods. Moving forward, we will focus to the highest levels of governance of Collins Foods. on strategic investments to support further growth in the The Board looks forward to an exciting year ahead as we performing KFC and Snag Stand brands and, when the time focus on building upon the momentum achieved in 2015, is right, will pursue new growth opportunities. and supporting the management team as they pursue strategic While a limited number of Sizzler Australia restaurants will growth opportunities. close, we recognise consumers’ attachment to the Sizzler brand and will monitor the remaining businesses on an ongoing basis. Snag Stand continues to deliver healthy sales growth and receive positive consumer feedback. Patronage is growing and the business is building a strong platform to support future, Robert Kaye SC sustainable growth. We will continue to pursue our solid Independent Non-executive Chairman pipeline of eastern seaboard expansion opportunities under a refined operational and economic model. 6 Collins Foods Limited Annual Report 2015 CEO’s report The 2015 financial year was a pleasing one for Collins Foods. Overall we achieved strong sales growth, increased margins, a strengthened balance sheet and an improved return on capital employed. Our achievements in 2015 are testament to the Company’s Operational performance steadfast commitment to maximising operational KFC performance, developing a solid growth platform, and KFC achieved strong growth in underlying revenue of 46.7% building further strength and resilience within the business.