Collins Foods, Australia's largest KFC franchisee, is expanding with the acquisition of a further 28 KFC restaurants in Tasmania, South Australia and Western Australia from Yum Brands for $110 million.
The acquisition will lift the number of KFC restaurants operated by Collins Foods to 223.
Collins Foods will fund the acquisition through a $44.1 million offer of new shares and $69.3 million in debt faciities.
Collins Foods on Monday also posted a 3.9 per cent fall in net profit for the year to April 30, down to $27.99 million.
Same-store sales in the KFC Australia business were up 0.7 per cent, compared to growth of 3.1 per cent a year earlier.
During the year the company opened seven new restaurants in Australia and one in Germany, and acquired 13 in Australia and 12 in Germany.
Collins Foods has also announced the acquisition of 16 KFC restaurants in the Netherlands, but the acquisition is now expected to be completed in the first half of fiscal 2018 due to delays in gaining local permits.
Collins Foods chief executive Graham Maxwell said the company's priorities are to grow the core KFC Australia business while integrating and growing the KFC Europe business.
"Given our position as the largest KFC franchisee in Australia, we are well placed to drive Collins Foods' next growth phase," Mr Maxwell said..
In Australia, the company plans to build eight new KFC restaurants and will integrate the 28 KFC restaurants acquired in Tasmania, South Australia and Western Australia into the Collins Foods' network.
In Europe, the company will integrate the 16 KFC restaurants acquired in the Netherlands.
Mr Maxwell said that with further growth on fiscal 2018, the company expects to continue to increase shareholder returns.
Collins Foods said its Sizzler Australia operations generated same-store sales growth of 0.4 per cent, but the closure of six restaurants in Australia pulled down overall revenue by 10.5 per cent.
Sizzler Asia grew, with royalty revenue up four per cent.
In fiscal 2017, five new restaurants opened, and four closed, in Thailand; three new restaurants opened in China, and one restaurant closed in Japan, taking the total number of restaurants in Asia to 68 at the year's end.
Collins Foods' Snag Stand has been placed under strategic review and will not receive further growth investment, the company said, after the business failed to improve trading despite menu changes.
COLLINS FOODS TO BOOST KFC OPS IN EUROPE
.* Full-year net profit down 3.9pc to $27.99m
* Revenue up 10.3pc to $633.56m
* Final dividend up 12.5pc to nine cents, fully franked
