KFC poised to expand after strong full year sales

Restaurant Brands is planning to expand the number of KFC restaurants it operates across Australia and New Zealand off the back of strong sales over the 12 months to February 2019, which contributed to the group’s overall 7.2 per cent increase in full-year sales of $764.6 million (NZ$794 million).

In Australia, KFC’s sales grew 27.8 per cent to $178.3 million, thanks to new store acquisitions in the period. Same-store-sales grew 4.7 per cent.

Starbucks saw a 4 per cent increase in sales to $15.4 million, and was sold to Tahua Capital on 23 October 2018.

Carl’s Jr., however, saw an 8.8 per cent decline in total sales to $30.7 million. Same-store-sales also fell 3.3 per cent over the year.

The group’s performance in New Zealand was more varied.

KFC’s New Zealand operations improved 5.3 per cent over the period to $324 million (NZ$336.5 million), and 4.3 per cent on a same-store basis, while Pizza Hut faltered – seeing a 14 per cent decrease in sales over the year to $34 million (NZ$35.4 million), down 6.1 per cent on a same-store basis.

The group is currently in the midst of a partial takeover, with investor Finaccess Capital having proposed to acquire up to 75 per cent of the group’s shares for a premium of NZ$9.45 ($8.68) cash per share.

Restaurant Brands shares currently sit at $7.33 on the ASX, and $NZ8.62 on the NZX. Currently, Finaccess has secured 33.71 per cent, or just over 42 million, shares.

The board of Restaurant Brands “unanimously” recommends shareholders accept the partial takeover offer, which closes on 12 March 2019, based on the absence of a superior proposal.