28 July 2023
ASX Market Announcements Office
10 Bridge Street
SYDNEY NSW 2000
Via ASX Online
Dear ASX Market Announcements Officer
ANNOUNCEMENT FOR RELEASE VIA MARKET ANNOUNCEMENTS PLATFORM
Please find attached Collins Foods Limited’s 2023 Annual Report for release via the ASX
Market Announcements Platform.
For further information, please contact:
Corporate
Drew O'Malley
Managing Director & CEO
P: +61-7 3352 0800
Investors
Ronn Bechler
Automic Markets
P: +61-400 009 774
E: ronn.bechler@automicgroup.com.au
Media
Tristan Everett
Automic Markets
P: +61-403 789 096
E: tristan.everett@automicgroup.com.au
By Order of the Board
Frances Finucan
Company Secretary
~2023~
Annual
REPORT
ACN 151 420 781
Key dates
End of financial year 2023 Sunday 30 April 2023
Full year 2023 results announcement Tuesday 27 June 2023
Record date for final dividend Tuesday 11 July 2023
DRP election date Wednesday 12 July 2023
Final dividend pricing period Thursday 13 to Wednesday 26 July 2023
Final dividend payment Tuesday 1 August 2023
DRP issue date Tuesday 1 August 2023
Annual General Meeting Friday 1 September 2023
End of half year 2024 Sunday 15 October 2023
Half year 2024 results announcement Tuesday 5 December 2023
Record date for interim dividend Tuesday 12 December 2023
DRP election date Wednesday 13 December 2023
Interim dividend pricing period Thursday 14 to Friday 29 December 2023
Interim dividend payment Tuesday 7 January 2024
DRP issue date Tuesday 7 January 2024
Contents
ii Our Vision, Mission and Values
iii Our Financial Performance
iv Our Year in Review
vi Our Positive Impact
vii Our Brands
viii Chair’s Message
x Managing Director & CEO’s Report
xii
Financial Report
1 Directors’ Report
10
Letter from the Chair of the Remuneration
and Nomination Committee
Remuneration Report
11
29 Auditor’s Independence Declaration
30 Consolidated Income Statement
31 Consolidated Statement of Comprehensive Income
32 Consolidated Balance Sheet
33 Consolidated Statement of Cash Flows
34 Consolidated Statement of Changes in Equity
35 Notes to the Consolidated Financial Statements
88 Directors’ Declaration
89
95
96 Corporate Directory
Independent Auditor’s Report
Shareholder Information
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 i
Our Vision, Mission and Values
ii ANNUAL REPORT 2023 | COLLINS FOODS LIMITED
Our Financial Performance
Revenue
(continuing operations)
Statutory EBITDA
(continuing operations, post AASB 16)
Underlying EBITDA
(continuing operations, post AASB 16)
14.2%
to $1.35b
(FY22: $1.18b)
3.7%
to $197.9m
(FY22: $205.5m)
1.2%
to $205.1m
(FY22: $207.5m)
Underlying NPAT
(continuing operations, post AASB 16)
Total FY23 Fully
Franked Dividend
12.1%
to $51.9m
(FY22: $59.0m)
27.0CPS
(FY22: 27.0cps)
Net Operating Cash Flow
(post AASB 16)
Statutory NPAT
(continuing operations, post AASB 16)
$10.1M
to $146.2m
(FY22: $156.3m)
79.1%
to $11.3m
(FY22: $54.1m)
Note: References to continuing operations excludes Sizzler Asia.
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 iii
Our Year in Review
In FY23 we built
20 new
restaurants
10 for KFC Australia,
2 for KFC Europe and
8 for Taco Bell.
iv ANNUAL REPORT 2023 | COLLINS FOODS LIMITED
We operated
300
restaurants
in Australia, Germany and the
Netherlands. We employ over
17,000 people in Australia,
Germany and the Netherlands.
We continued to
focus on innovation,
excellence and
building brand
strength to
drive sustainable
long-term growth.
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 v
Our Positive Impact
Cr e a ting
unmatched
PEOPLE
experiences
People and
Communities
Establish Collins Foods Giving as a
best-in-class signature program by
2026 with 75%+ Participation Rate.
Maintained a 36% participation rate
in Collins Foods Giving, despite
economic challenges and a rising strain
on living costs.
• Safety management system that
underpins strong safety culture
• Collins Foods Giving employee
Participation Rate in FY23: 36%
(FY22: 36%)
• Collins Family Fund: over $275,000 granted
• Equitable employee profile: FY23:
47.4% female, 51.9% male, 0.7%
non-binary, intersex or preferred
not to say
• Employing young Australians: 577
traineeships with 371 completed in FY23
(FY22: 566 with 307 completed)
• Expansion of participation in
Food Recovery
• Extended wellbeing strategy to include
EAP Ambassadors
•
•
Introduced the first Collins Psychosocial
Questionnaire
Introduced Career Corridors to support
career pathways.
S
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3
2
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Ma king a
POSITIVE
IMPACT
Be ing
BRILLIANT
AT THE BASICS
Planet
Governance
Commitment to continuous
improvement towards best-practice
governance standards in all our
business activities.
Continuing to make progress towards
best-practice governance standards.
• We expect our people and those
who conduct business with us to
act with integrity, ethically and with
openness, honesty and fairness
• Food safety management
system underpins strong food
safety culture.
Reduce our carbon footprint
by achieving a 25% reduction in
greenhouse gas emissions by 2026
compared to FY21.
Increase diversion of waste from
landfill by 25% by 2026 compared
with FY22.
The reduction in greenhouse gas emissions
from FY21 to FY23 has been 11.4%.
This reduction includes a significant growth
of our business in 2023 with 8 new Taco
Bell and 11 new KFCs as well as an energy
offset from the implementation of our
solar program. The greening of the national
grid resulted in changes to the National
Greenhouse Accounts (NGA) factors which
has contributed 9.5% towards our reduction.
As at year-end, waste diversion is 19.5%
(FY22: 18.3%).
• Renewable energy: 162 solar panel
systems were installed by the end
of the reporting period. A total of 164
have been installed at the time
of writing this report
• Reducing Scope 1 and 2 GHG
despite increasing restaurants:
FY23: 60,776 tonnes CO2-e
(FY22: 65,926 tonnes CO2-e)
• Reducing average energy
consumption per restaurant:
FY23: 1,177 GJ* (FY22: 1,226 GJ*)
• Reducing waste to landfill by diverting,
reusing, recycling or upcycling waste.
FY23: total 13,297 tonnes and a waste
diversion rate of 19.5% for FY23
(FY22: 18.3%)
• Organics waste diversion launched
at 23 stores
• Opportunity: water management and
other energy efficiencies
•
In FY23, we planted over 7,000 trees.
In FY24, we aim to plant another
11,000 trees.
* gigajoules
vi ANNUAL REPORT 2023 | COLLINS FOODS LIMITED
Our Brands
KFC
AUSTRALIA
KFC
EUROPE
TACO
BELL
KFC Australia
experienced strong
topline growth thanks to
its operational excellence,
focus on innovation and
high consumer brand
trust and loyalty.
272
restaurants
$1.05b
Revenue
5.8%
Same Store
Sales growth
19.2%
EBITDA margin
(post AASB 16)
KFC Europe's strong
same store sales
growth supported
stable margins.
Taco Bell is
consolidating to
refocus on same
store sales.
64
restaurants
$249.5m
Revenue
13.9%
Same Store
Sales growth
13.2%
EBITDA margin
(post AASB 16)
28
restaurants
$48.7m
Revenue
TO -4.8%
Same Store
Sales growth
(3.2)%
EBITDA margin
(post AASB 16)
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 vii
Chair’s Message
Collins Foods delivered solid
top-line growth in FY23 amidst a
challenging landscape, benefitting
from increasing scale in Australia
and Europe.
Growth underpinned by KFC brand
strength and e-commerce
Both KFC businesses recorded strong same store sales growth,
reflecting the continued strength of the brand and increased
adoption of digital and delivery channels.
KFC Australia surpassed $1 billion in sales for the first time. Higher
ticket sizes and strong growth in e-commerce, supported by the
rollout of UberEats, were primary contributors to the increase in
same store sales growth. With the addition of 11 new restaurants,
Collins Foods’ mature Australian network now stands at 272.
Collins Foods’ European KFC operations continued its strong
momentum, delivering impressive double-digit revenue and same
store sales growth as operational control under our Netherlands
Corporate Franchise Agreement (CFA) strengthened brand and
product quality perceptions. Increased transaction volumes and
higher ticket sizes as value-led marketing campaigns resonated with
customers driving same store sales growth. Collins Foods continues
to move towards scale in the region with its footprint increasing
more than 50% over the past two years. Five new restaurants
opened in FY23 and a further eight were acquired in May 2023.
Digital and delivery remain key growth drivers for all three business
units. Convenience is also key for Taco Bell with a high delivery
mix and greater accessibility supporting brand awareness and trial.
A successful UberEats rollout improved same store sales in the
second half of FY23, and same store sales returned to positive in
FY24 as marketing and product quality initiatives begin to impact.
Dividend maintained
In FY23, Collins Foods delivered record revenue of $1.3495 billion,
up 14.2% over the prior year due to its scaling footprint and growth
across all business units.
Topline growth combined with operational efficiencies and cost
mitigation initiatives helped to alleviate some of the significant
cost inflation across the Group, with underlying EBITDA down 1.2%
to $205.1 million. Underlying NPAT decreased 12.1% to $51.9 million.
Statutory NPAT was impacted by a non-cash accounting charge
taken to impair the remainder of Taco Bell.
The Company remained highly cash generative with $146.2 million
in cash flow from operating activities, facilitating investment in new
restaurants, remodels, and acquisitions.
Taking into consideration Collins Foods’ operating cash flows, strong
balance sheet, strength of the business and growth opportunities,
the Board was pleased to declare a fully franked final dividend of
15.0 cents per share, bringing total FY23 dividend to 27.0 cents per
share fully franked, in-line with the prior year.
Well positioned in a challenging landscape
While cost inflation for some commodities is beginning to
moderate, margin pressures are likely to remain for most of the
coming year. Collins Foods is well-positioned to navigate these
challenging conditions with positive same store sales growth across
all three business units in the first seven weeks of FY24, and a strong
program of margin support initiatives across energy, supply chain,
and menu pricing.
KFC Australia EBITDA margin (pre AASB 16) is expected to remain
broadly neutral in FY24 with improvement closer to historical
levels in FY25. Despite a continued high inflationary environment in
Europe, our European business is targeting limited EBITDA margin
contraction in FY24.
Collins Foods continues to execute on its long-term growth plans
with 13 to 18 new restaurant openings planned across the Group
in FY24.
Positive Impact Strategy
Collins Foods continued its commitment to sustainable growth
in FY23, progressing initiatives across people and communities,
planet and governance. Our Positive Impact Report, published
separately, outlines Collins Foods’ Australian achievements over
the year, including increased safety and wellbeing for employees,
more sustainable operations, and greater cyber and data
management capability.
While we are proud of our progress over the past three years, we
have recently appointed a Group ESG & Sustainability Manager
to further strengthen our environmental, social and governance
(ESG) program. Collins Foods is partnering with EY Australia on a
materiality assessment to identify and understand key sustainability
priorities, impacts, and opportunities within a dynamically changing
landscape. A climate risk assessment and action plan are also being
developed to deliver greater alignment with the Taskforce on
Climate related Financial Disclosures (TCFD) recommendations.
Note: All figures are post AASB 16 and from continuing operations unless otherwise stated. Continuing operations excludes Sizzler Asia.
viii ANNUAL REPORT 2023 | COLLINS FOODS LIMITED
Board changes
During the year, Collins Foods welcomed highly credentialed
executive Nicki Anderson to the Board as a new independent,
Non-executive Director and a member of the Audit & Risk and
Remuneration & Nomination Committees. Nicki is an excellent
addition to the Board, bringing more than 25 years’ leadership
experience across strategy, sales, marketing, customer experience
and innovation within the global food, beverage, and consumer
goods sectors.
On behalf of my fellow Directors, I would also like to acknowledge
Russell Tate who, after 12 years, is retiring from his Non-executive
Director role at the upcoming 2023 AGM, in line with succession
plans. Russell’s contribution to the Board has been significant,
notably leading the Company as Chair from its listing through to
March 2015. We wish Russell all the best for the future.
Thank you
On behalf of the Board, I would like to thank our more than 17,000
employees for their continued hard work and dedication. Our solid
FY23 performance amidst a challenging landscape is a testament to
our entire team and highly skilled leadership, who continue to raise
the bar on creating unmatched experiences for our customers.
I would also like to acknowledge my fellow Directors for their
valuable input and guidance throughout the year. And finally,
thank you to our shareholders for your support. Your company
is well placed to navigate the volatility ahead, operating some of
the world’s most recognisable brands within the highly resilient,
value-centric QSR industry.
Robert Kaye SC
Independent Non-executive Chair
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 ix
Managing Director & CEO’s Report
In FY23, Collins Foods continued
to execute on its sustainable
growth plans across all three
business units whilst managing
cost inflation during difficult
trading conditions.
The Company achieved this result through its ‘restaurants
done better’ approach to all operations and customer service,
focussing on its value credentials and harnessing the strength of
the powerhouse KFC brand to lead the sector on value, quality,
and taste at a time when this really matters.
KFC
KFC’s strong topline growth in Australia and Europe reflect
the resilience and trust in the brand during challenging
economic conditions.
KFC operations in Australia strengthened in FY23 through an
increased footprint and rollout of innovative marketing initiatives
that are driving mainstream appeal, while the Company’s KFC
Europe brand delivered impressive double-digit revenue and SSS
growth, even with significant inflationary pressures in the region.
Taco Bell
New brands take time to gain traction, even those with the appeal
of Taco Bell. Collins Foods is expanding the brand presence of Taco
Bell in Australia by investing in marketing activities and campaigns.
The Company is also being backed by Taco Bell International (Yum!)
to raise awareness of the brand and increase sales so the Taco Bell
brand can achieve scale within three years.
Financial performance
Collins Foods delivered another solid financial performance in
FY23. All business units achieved revenue growth, with KFC Europe
seeing double-digit revenue and earnings growth and KFC Australia
surpassing the $1 billion sales milestone. Group revenue increased
14.2% to $1.3495 billion, underpinned by solid KFC same stores sales
growth and the contribution of 21 additional restaurants.
Statutory EBITDA was $197.9 million, while underlying EBITDA was
$205.1 million, reflecting pressures on supply chains, labour and
inflationary costs.
Statutory NPAT was $11.3 million and underlying NPAT came in at
$51.9 million, due to a non-cash accounting impairment of $36.7
million for Taco Bell.
Net cash flow from operations decreased to $146.2 million from
$156.3 million in FY22, as the Company increased its investment
in growth initiatives. Net debt grew to $212.2 million and the net
leverage ratio grew from 1.17 to 1.47: (pre AASB 16).
Operational performance
KFC AUSTRALIA
The KFC Australia brand is becoming more salient for customers
as we continue to expand both its physical and digital presence.
In FY23 our growing KFC Australia business delivered more
than $1 billion in revenue, up 10% on the prior year, driven by an
expanding network of 272 restaurants and solid same store sales
growth. Transactions remained broadly flat on the prior year, in line
with the overall Australian QSR market.
Same store sales rose 5.8% over the prior period, reflecting strong
growth in e-commerce, increased availability through Uber Eats,
and higher ticket. The second half of FY23 saw almost a quarter of
all sales come through our growing digital and delivery channels,
up more than 7% over the same period last year. Increased
accessibility has been a key driver of this growth, with the brand
now available through all major aggregators while new digital
software has improved personalisation of offers through the app
with great take-up of these promotions.
To accommodate our changing order mix and evolving customer
trends, we are embedding convenience and innovation in new
builds with dedicated delivery-driver entrances and waiting
areas, increased kiosk installation, as well as enhanced design and
music elements. These improvements were also rolled out to 47
remodelled restaurants during the year. At the same time, we’re
investing in back-of-house technology to improve efficiency, speed
and reduce wastage.
While Australia currently has the highest penetration of KFC
per capita of any global market, we still believe there is room to
grow with plans to open a further nine to 12 restaurants over the
coming year. This is ahead of our development agreement pace.
Underlying EBITDA was $201.6 million, with the EBITDA margin
declining from 21.6% to 19.2% (pre AASB 16: from 17.4% to 15.0%),
reflecting the impact of inflationary pressures and supply chain.
KFC EUROPE
KFC Europe was a standout for the business in FY23, especially
considering the challenging local market conditions in which annual
inflation more than tripled, high energy costs reached record levels,
and there were sizeable increases in labour and food. Same store
sales grew +13.9% and revenue increased 31% to $249.5 million,
as Collins Foods was able to utilise marketing activities through
the Netherlands Corporate Franchise Agreement (CFA).
Both the Netherlands and Germany saw solid sales transaction
volume increases and a higher ticket. The growth in sales was made
possible by a margin strategy that prioritised value initiatives and
helped mitigate significant cost pressures.
With our increased marketing and operational control, both
consideration and conversion increased in FY23, as did our positive
value metrics versus competitors.
Note: All figures are post AASB 16 and from continuing operations unless otherwise stated. Continuing operations excludes Sizzler Asia.
x ANNUAL REPORT 2023 | COLLINS FOODS LIMITED
Like in Australia, innovation is key in our product strategy, with KFC
Netherlands’ veggie platform one of the highest in the world. Digital
channels, at double-digit levels, are key to our convenience strategy,
with improvements made to kiosk, delivery, and the introduction of
a new app during the year.
Underlying EBITDA grew 19.0% to $32.8 million. On a post AASB 16
basis, the EBITDA margin contracted from 14.5% to 13.2%, noting that
the pre AASB16 EBITDA margin of 6.6% was consistent with FY22.
Collins Foods has grown its FY23 market share for KFC in the
Netherlands to 64%, through our 56 restaurants. This growth is
in line with the CFA, which will see the Company target up to 130
net new restaurants by 2031. Collins Foods is seeing support of our
leadership from sub-franchisees in the country, which was bolstered
by it winning Franchisee of The Year in Western Europe by Yum!.
The Company also continues to look for more opportunities to
further increase its market share in the Netherlands.
TACO BELL
Collins Foods has initiatives in place to generate more customers
for its 26 Taco Bell restaurants in Australia through a metro cluster
strategy that focuses on deliveries and marketing that drives more
consumer trial and engagement. They feature the value of iconic
craveable Taco Bell products at key price points and are based on
improved quality of product through increased engagement with
local suppliers to create flavour profiles and consistency that suit
local tastes.
Taco Bell saw revenue growth of 36.1% to $48.7 million, due to the
opening of eight new restaurants across Australia in FY23. Same
store sales improved over the second half in part due to the high
25% delivery mix and successful rollout of Uber Eats, but remained
down 4.8% on a full year basis.
EBITDA profitability at the restaurant level was at $2.8 million, a
decrease of $1.2 million from FY22, and underlying EBITDA saw a loss
of $1.5 million. This loss was expected as Collins Foods continues to
invest in Taco Bell’s growth initiatives.
SIZZLER ASIA
Sizzler Asia rebounded as operating conditions normalised with
royalty revenue up 45.8% to $4.1 million, generating EBITDA growth
of $2.9 million – an increase of more than 70% on the prior year.
The Sizzler Asia business, considered non-core to our strategy, has
now been sold for SGD $20.2 million under an agreement with a
subsidiary of listed Thai company Minor International. The sale is
on a cash-free, debt free and working capital neutral basis, and is
expected to complete in early July 2023.
The capital has been effectively redeployed to support the
expansion of our high-growth European operations.
ESG/Sustainability
Collins Foods’ Positive Impact Strategy has some of the
Australian QSR industry’s most substantial environmental,
social and governance targets for a restaurant operator of its size.
Over the year, we continued to work towards these targets under
the banners of people and communities, planet, and governance.
We pride ourselves on a people-first culture and continue to create
unmatched experiences for our team and customers. We continue
to regularly promote health and safety practices within our day
to day operations to strengthen our safety culture. Enrolment
in Collins Foods Giving was stable at 36% despite cost-of-living
pressures also impacting our team, with the Collins Family
Fund granting $275k to employees experiencing challenging
circumstances. Importantly, our people can now share in our
success under a newly launched Ownership Share Plan.
On sustainability, Collins Foods decreased its greenhouse gas
(GHG) emissions across its operations by 12.7% in FY23, down 20.3%
since FY21, despite continuing to grow its restaurant network.
Solar is now installed on all available 162 drive-thru restaurants
(subject to landlord and council approvals), with installations in
Europe commencing next year. We reduced waste to landfill with a
diversion rate of 19.6%, supported by organics waste diversion now
in 23 stores, and food recovery partnerships being rolled out to KFC
restaurants in Tasmania, Queensland and NSW.
Demonstrating our commitment to best practice ESG standards,
Collins Foods has appointed a Group Sustainability & ESG Manager
to strengthen our capability in this area and ensure our growth
remains sustainable.
Outlook
Inflation continues to be a real part of the Australian and European
operating environments, and is expected to impact margins for
much of FY24. Encouragingly, most commodities appear to be
easing off their peaks and we have initiatives in place across energy,
supply chain and menu pricing to mitigate inflationary pressures
across all three business units. These short-term headwinds have
not changed our growth trajectory and we continue to prioritise
customer value to protect transactions and long-term brand health.
Improving brand strength and a recent uptick in market share has
validated this is the right approach in the current economic climate.
At the same time, e-commerce remains a key growth driver and
we continue to increase accessibility of KFC and Taco Bell to meet
customers’ increasing demand for convenience.
I’d like to take this opportunity to acknowledge all Collins
Foods staff for their enormous contribution during the year.
Our continued growth in a challenging economic environment
is directly attributable to the hard work of our passionate team
members. I’d also like to say a special thank you to Group CFO Nigel
Williams, who left the business in mid-July. Nigel has been a valued
part of our growth story over the past eight years, and we wish him
all the best for the future.
Thank you to our loyal shareholders for your ongoing support over
the past year. We look forward to executing on our sustainable
growth plans for our KFC and Taco Bell businesses, confident that
our best days are ahead of us.
Drew O’Malley
Managing Director & CEO
COLLINS FOODS LIMITED | ANNUAL REPORT 2023 xi
~2023~
Financial
REPORT
ACN 151 420 781
xii FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
COLLINS FOODS LIMITED ABN 13 151 420 781
FOR THE REPORTING PERIOD ENDED 30 APRIL 2023
Contents
1 Directors’ Report
11 Remuneration Report
11
11
12
17
18
19
22
23
24
25
25
25
25
25
25
26
26
26
28
Persons covered by this
Remuneration Report
Overview of Remuneration
Governance Framework
and Strategy
Executive remuneration
Company performance
Statutory Remuneration
disclosures for FY23
Performance outcomes for
FY23 and FY22 including STI
and LTI assessment
Employment terms for KMP
Executives
Non-executive Director fee
rates and fee limit
Changes in KMP held equity
Group Securities Trading
Policy
Securities Holding Policy
Remuneration Consultant
Engagement policy
Other remuneration related
matters
Most recent AGM –
Remuneration Report
comments and voting
External remuneration
consultant advice
Indemnification and insurance
of officers
Proceedings on behalf of the
Company
Non-audit services
Auditor's Independence
Declaration
29 Auditor’s Independence Declaration
30
31
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
62
62
63
64
65
66
69
72
73
74
75
78
78
83
84
84
85
86
87
87
62 G: OTHER ITEMS
62
G1: Commitments for
expenditure
G2: Other gains/(losses) – net
G3: Earnings per share
G4: Receivables
G5: Property, plant and
equipment
G6: Intangible assets
G7: Impairment of assets
G8: Leases
G9: Trade and other payables
G10: Provisions
G11: Reserves
G12: Tax
G13: Auditor’s remuneration
G14: Contingencies
79 H: GROUP STRUCTURE
79
H1: Subsidiaries and Deed of
Cross Guarantee
H2: Parent entity financial
information
I: BASIS OF PREPARATION
AND OTHER ACCOUNTING
POLICIES
I1: Basis of preparation
I2: Changes in accounting
policies
I3: Other accounting policies
J: SUBSEQUENT EVENTS
J1: Subsequent events
Independent Auditor’s Report
Directors’ Declaration
88
89
95 Shareholder Information
96 Corporate Directory
32
33
34
Consolidated Balance Sheet
Consolidated Statement of
Cash Flows
Consolidated Statement of
Changes in Equity
35 Notes to the Consolidated
Financial Statements
35 A: FINANCIAL OVERVIEW
35 A1: Segment information
37 A2: Business combinations
38 A3: Revenue
41
A4: Material profit or loss items
from continuing operations
42 B: CASH MANAGEMENT
42 B1: Cash and cash equivalents
44 B2: Borrowings
44 B3: Ratios
45 B4: Dividends
46
C: FINANCIAL RISK
MANAGEMENT
46 C1: Financial risk management
49
C2: Recognised fair value
measurements
C3: Derivative financial
instruments
D: REWARD AND
RECOGNITION
D1: Key management personnel
D2: Share based payments
D3: Contributed equity
58 E: RELATED PARTIES
58
E1: Investments accounted for
using the equity method
E2: Related party transactions
F: DISCONTINUED
OPERATION
F1: Description
F1 (a): Financial performance
and cash flow information
F1 (b): Assets and liabilities of
disposal group classified as
held for sale
51
54
54
54
57
59
60
60
60
61
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 xiii
DIRECTORS’ REPORT
Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Collins Foods
Limited (the Company) and the entities it controlled at the end of, or during, the period ended 30 April 2023.
Directors
The names of the Directors of the Company during or since the end of the financial period are as follows:
Name
Robert Kaye SC
Nicki Anderson
Mark Hawthorne
Christine Holman
Bronwyn Morris AM (1)
Kevin Perkins
Russell Tate
Drew O’Malley
Date of appointment
7 October 2014
13 January 2023
23 December 2021
12 December 2019
10 June 2011
15 July 2011
10 June 2011
29 June 2021
(1) Bronwyn Morris AM retired from the Board of Directors on 2 September 2022.
Principal activities during the period
During the period, the principal activity of the Group was the operation, management and administration of restaurants in
Australia, Europe and Asia. There were no significant changes in the nature of the Group’s activities this financial year.
Operating and financial review
GROUP OVERVIEW
The Group’s business is the operation, management and administration of restaurants, currently comprising three restaurant
brands: KFC, Taco Bell and Sizzler.
At the end of the period, the Group operated 272 franchised KFC restaurants in Australia, 16 franchised KFC restaurants in
Germany, 48 franchised KFC restaurants in the Netherlands and 28 franchised Taco Bell restaurant in Australia, which all
compete in the quick service restaurant market. The Group is also a franchisor of the Sizzler brand in South East Asia, with
71 franchised restaurants predominantly in Thailand, but also in Japan.
The KFC and Taco Bell brands are two of the world’s largest restaurant chains and are owned globally by Yum!. In Australia, the
Group is the largest franchisee of KFC restaurants.
During the current financial period, inflation and the macroeconomic backdrop affecting consumers have combined to
impact the operations and financial performance of the business. This has affected all brands. The Group has worked closely
with all stakeholders and our franchisor, Yum! Brands to ensure we undertake activities to mitigate these pressures whilst
continuing to provide great value for our customers.
GROUP FINANCIAL PERFORMANCE
Key statutory financial metrics in respect of the current financial period and the prior financial period are summarised in the
following table:
Statutory financial metrics
Total revenue from Continuing operations (1)
Earnings before interest, tax, depreciation, amortisation and impairment
(EBITDA) from Continuing operations (1)
Earnings before interest and tax (EBIT) from Continuing operations (1)
Profit before related income tax expense from Continuing operations (1)
Income tax (expense) from Continuing operations (1)
Net profit attributable to members (NPAT) from Continuing operations (1)
Profit from Discontinued operations
Net assets
Net operating cash flow
2023
$m
1,348.6
197.9
47.1
14.7
(3.4)
11.3
1.5
384.5
146.2
2022
$m
1,181.7
205.5
109.9
79.6
(25.5)
54.1
0.7
393.5
156.3
Change
$m
166.9
(7.6)
(62.8)
(64.9)
22.1
(42.8)
0.8
(9.0)
(10.1)
(1) The prior reporting period has been restated to present the impacts of the current period discontinued operations (as outlined in Note F1).
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1 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
Statutory financial metrics
Basic earnings per share from Continuing operations (1)
Basic earnings per share from Discontinued operations
Total basic earnings per share attributable to members of Collins Foods Limited
Total dividends paid/payable in relation to financial period (2)
Directors’ report
2023
cents
per share
2022
cents
per share
Change
cents
per share
9.62
1.25
10.87
27.00
46.34
0.62
46.96
27.00
(36.72)
0.63
(36.09)
–
(1) Comparative Earnings per share numbers have been restated to present the impacts of the current period discontinued operations (as outlined in Note F1).
(2) Dividends paid/payable is inclusive of dividends declared since the end of the relevant reporting period.
The Group’s total revenue increased by 14.1% to $1,348.6 million mainly due to same store sales growth and new restaurant
openings.
Despite an increase in total revenue, the business experienced significant cost pressures, which despite good business controls,
resulted in an EBITDA for the reporting period of $197.9 million. This represents a decrease on the prior reporting period of $7.6
million, down 3.7%.
EBITDA, EBIT, NPAT and EPS were impacted by the following non-trading items:
Restaurant impairments and provisions (1) – Taco Bell
Taco Bell provision for restaurant closures
KFC Europe impairment costs
Acquisition and operational integration costs
Europe Deferred Tax Asset/Deferred Tax Liability write-offs
Other non-trading items
Total non-trading items - continuing operations
(1) EBITDA includes onerous lease and other related costs.
EBITDA
$000
3,661
527
–
3,495
–
(500)
7,183
EBIT
$000
52,715
527
4,592
3,495
–
(500)
60,829
NPAT
$000
36,712
369
4,592
3,495
(4,194)
(350)
40,624
The consolidated NPAT effect of these non-trading items was $40.6 million.
In summary, from the Statutory NPAT from Continuing operations results of $11.3 million, excluding the impact of the non-trading
items of $40.6 million (outlined in the table above), the Group achieved an Underlying NPAT result of $51.9 million.
Underlying financial metrics excluding non-trading items which occurred in the current period are summarised as follows:
Underlying financial metrics from Continuing operations
Total revenue (1)
Earnings before interest, tax, depreciation, amortisation
(Underlying EBITDA) (1)
2023
$m
1,348.6
205.1
2022
$m
1,181.7
207.5
Net profit attributable to members (Underlying NPAT) (1)
51.9
59.0
(1) The prior reporting period has been restated to present the impacts of the current period discontinued operations (as outlined in Note F1).
Underlying financial metrics
Earnings per share (Underlying EPS) basic from Continuing operations (1)
Total Earnings per share (Underlying EPS) basic
2023
cents per
share
44.29
45.54
2022
cents per
share
50.58
51.16
Change
166.9
(2.4)
(7.1)
Change
cents per
share
(6.29)
(5.62)
(1) Comparative Earnings per share numbers have been restated to present the impacts of the current period discontinued operations (as outlined in Note F1).
Underlying EBITDA of $205.1 million is a reduction of $2.4 million on the prior reporting period, mainly due to significant cost
pressures experienced by the business that were not fully mitigated by the growth in revenue.
Management consider that adjusting the results for non-trading items allows the Group to more effectively compare underlying
performance against prior periods.
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DIRECTORS' REPORT (CONTINUED)
Review of underlying operations
KFC AUSTRALIA
The overall performance across the KFC business in Australia has been very positive. Revenue in KFC Australia was up 10% on the
prior corresponding period to $1,051.3 million, driven by positive same store sales growth of 5.8% for the full year, cycling 1.4%
same store sales growth in the prior year, together with the opening of 10 new restaurants and one acquisition. KFC Australia
underlying EBITDA decreased by 2.6%, down from $206.9 million to $201.6 million, with an overall underlying EBITDA margin of
19.2%. At the end of the financial period, 272 restaurants were in operation.
KFC Australia continues to focus on providing customers with great value, great tasting food and high levels of customer service.
Growth in digital and delivery channels remains strong with ecommerce sales accounting for 24.3% of total sales, up from 16.9%
during the prior period.
KFC EUROPE
KFC Europe contributed revenue of $248.7 million and $32.8 million in underlying EBITDA. By the end of the period, 64 restaurants
were in operation, with 48 restaurants in the Netherlands and 16 in Germany. Underlying EBITDA margin was 13.2%. Same store
sales growth was 13.9% on the prior corresponding period. This is a direct result of high quality consumer marketing and brand
building, together with excellent operations.
During the year, Collins Foods Netherlands’ footprint increased to 48 out of 82 restaurants, representing a 58.5% market share.
This was achieved through the opening of three restaurants. Collins Foods Germany closed one restaurant during the period.
The Netherlands Corporate Franchise Agreement (CFA) was entered into during the prior year and Collins Foods Europe
continues to have primary control over the Netherlands market, including targeted marketing campaigns, continuing the
“Everyday Value” menu and having control on price. During FY23, all development and performance incentive targets related
to the CFA were achieved.
KFC Europe’s priority remains providing customers with great value and great tasting food and building more restaurants.
TACO BELL
At the end of the period, 28 Taco Bell restaurants were in operation with 15 located in Queensland, nine located in Victoria and
four located in Western Australia. Taco Bell contributed revenue of $48.7 million and $(1.5) million in underlying EBITDA. Same
store sales decline was 4.8% on the prior corresponding period.
Taco Bell is still a relatively new brand in Australia and the focus remains on driving awareness and trial of the brand whilst
improving the product quality and refining the brand positioning.
Management recognised impairment expense for the Taco Bell restaurants of $20.2 million of Property, plant and equipment,
$27.8 million of Right-of-use assets and $1.1 million of Franchise rights.
Taco Bell continues to sell well through digital and delivery channels with opportunity for further growth and expansion in the
upcoming financial year.
SIZZLER
Sizzler franchise operations in Asia contributed $4.1 million in revenue. Operations improved during the financial period resulting
in a 45.8% increase in revenue over the prior corresponding period. Sizzler Asia EBITDA grew by 73.6%, up from $1.7 million to
$2.9 million.
Strategy and future performance
GROUP
The Group’s strategy is to be renowned for running high quality restaurants, build new restaurants in all its markets and with all its
brands, and improve the economics of the Taco Bell businesses. In addition, the Group will continue to pursue KFC acquisition
opportunities where available. Organisational capability is continually being strengthened to support this growth, including risk,
compliance and Environmental Social Governance (ESG).
KFC AUSTRALIA
The plan for the KFC Australia business is to continue to deliver great value products and excellent customer experiences,
together with expanding digital and delivery channels. This will be complemented by further restaurant builds.
KFC EUROPE
In Europe, the focus will be on continuing the momentum in same store sales growth, mitigating where possible the inflationary
impact on margins and opening an increasing number of restaurants.
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DIRECTORS' REPORT (CONTINUED)
TACO BELL
Taco Bell will look to consolidate and focus on growing same store sales. This activity will include implementation of product
quality improvements and marketing initiatives to drive customer trial and engagement, in combination with a greater focus on
delivery and value.
Key risks
The key risks faced by the Group that have the potential to affect the financial prospects of the Group, as disclosed above,
and how the Group manages these risks, include:
•
food safety – there is a risk that the health and safety of the public is compromised from food products. We address this risk
through robust internal food safety and sanitation practices, audit programs, customer complaint processes, supplier partner
selection protocols and communication policy and protocols;
• workplace health and safety – there is a risk that the Group does not provide a safe working environment for its people,
contractors and the community. We address this risk through robust internal work health and safety practices, the
implementation of initiatives and education programs with a focus on preventative measures with enhanced dedicated
support in high risk areas to ensure the wellbeing of our key stakeholders;
• people – there is a risk that the Group is unable to maintain a culture that develops and attracts a sustainable workforce,
and in compliance with employment laws. We address this risk through deploying contemporary people practices, reward
and recognition programs, talent management strategies, employee value propositions and ongoing compliance
monitoring of employment laws (including wage compliance);
• growth – there is a risk that the Group is unable to effectively identify, execute and expand as per our growth targets. We
address this risk through having an experienced management team, robust project management processes involving trials
and staged rollouts and regular strategic reviews and driving sales and financial performance across our Brands. We
maintain a close working relationship with the franchisor, having our team members sit on relevant KFC advisory groups and
committees and monitoring compliance obligations;
•
•
•
supply chain disruption – there is a risk that the Group’s inability to source key food and consumable products in an ethical
manner, at the quality required, within the prescribed time frames. We address this risk through use of multiple suppliers
where possible with a diverse geographic base with multiple distribution routes. Our European supply chain have
implemented additional measures as a result of the war in Ukraine and the increase in energy prices;
information security – there is a risk that confidential or sensitive information can be accessed and disclosed by unauthorised
parties. We address this risk through increasing our external assurance activities and the implementation of a cyber security
plan including simulations; and
regulatory changes – there is a risk that the Group is unable to identify and address material regulatory changes that impact
the business. We address this risk by monitoring regulatory changes and their impacts on the group and obtaining advice
from external lawyers where required.
Collins Foods is working toward ensuring that risk management practices are embedded into all processes and operations.
Collins Foods is exposed to an element of climate related risks such as floods, drought, cyclones and bushfires. Collins Foods
continuously seeks opportunities to reduce the environmental impact of its operations across all its restaurants, whether they are
owned and operated in a franchisor or franchisee capacity.
Collins Foods releases a sustainability report describing the environmental, social and governance related initiatives and
opportunities relevant to it. During the year Collins Foods engaged EY Australia to provide advisory services to assist with the
development of a Taskforce on Climate related Financial Disclosures (TCFD) roadmap including a materiality assessment and
climate risk assessment.
The 2023 Modern Slavery statement for Collins Foods will be published in the second half of calendar year 2023.
In light of its partnership with the franchisor of its KFC Australia restaurants, it is suggested that the Collins Foods Modern Slavery
statement and sustainability report be read together with the KFC Australia modern slavery statement and social impact report
both available via its website: www.kfc.com.au.
DIVIDENDS
Dividends paid to members during the financial period were as follows:
Cents
per share
Total
amount
$000
Franked/
Unfranked
Date of
payment
Final ordinary dividend for the financial period ended 1 May 2022
15.0
17,560
Franked
1 August 2022
Interim ordinary dividend for the financial period ended
16 October 2022
Total
12.0
27.0
14,063
Franked
29 December 2022
31,623
In addition to the above dividends, since the end of the financial period, the Directors of the Company have declared the
payment of a fully franked final dividend of 15.0 cents per ordinary share ($17.6 million) to be paid on 1 August 2023 (refer to
Note B4 of the Financial Report).
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DIRECTORS' REPORT (CONTINUED)
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD
On 2 May 2023, Collins Foods announced that its wholly owned Dutch subsidiary, Collins Foods Netherlands Operations B.V.,
completed the acquisition of eight KFC restaurants in the Netherlands from R. Sambo Holding B.V.
The financial effects of this transaction have not been recognised at 30 April 2023 and the operating results and assets and
liabilities of the acquired company will be consolidated from 2 May 2023. The acquisition is expected to deliver additional scale
and to support in further leveraging the Group’s experience and operational capabilities in the Netherlands.
The purchase price payable was €8.0 million ($13.3 million), subject to adjustments. In addition, contingent consideration is also
payable as a component of consideration.
At the time the financial statements were authorised for issue, the Group had not completed the accounting for the acquisition.
In particular, the fair values of the assets and liabilities acquired are unable to be fully determined as the independent
valuations have not been completed. Further, the fair value of the contingent consideration is unable to be determined at this
time.
Full purchase price accounting will be finalised and disclosed in the 2024 half-year interim financial report.
On 23 February 2023, the Group signed a non-binding memorandum of understanding to sell the 100% owned SingCo Trading
Pte. Ltd Group (SingCo) for SGD20.2 million. The associated SingCo assets and liabilities are consequently presented as available
for sale and is reported as a discontinued operation as SingCo represents an identifiable, single geographical area of
operations.
The transaction is anticipated to complete in mid July 2023 and the full impact, including any gain on sale, will be disclosed in
the 2024 half-year interim financial report.
Other than noted above, the Group is not aware of any matters or circumstances that have arisen since the end of the
financial year which have significantly or may significantly affect the operations and results of the Group.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue to pursue the increase of profitability of its major business segments during the next financial period.
Additional comments on expected results of operations of the Group are included in the operating and financial review section
of this Report (refer above).
ENVIRONMENTAL REGULATIONS
The Group is subject to environmental regulation in respect of the operation of its restaurant sites. To the best of the Directors’
knowledge, the Group complies with its obligations under environmental regulations and holds all licences required to
undertake its business activities.
Information on Directors
DIRECTOR
Robert Kaye SC - LLB, LLM
Experience and expertise
Robert Kaye SC is a barrister, mediator and professional Non-executive Director.
Recognised for his strategic and commercially focused advice, Robert has acted
for various commercial enterprises – both public and private – across media, retail,
FMCG, property development, mining and engineering sectors. Drawing on his
experience as a senior member of the NSW Bar, including serving on the
Professional Conduct Committee and Equal Opportunity Committee, Robert has a
strong emphasis on Board governance and is well versed in Board processes.
Robert has significant cross-border experience, including corporate restructuring
and M&A across North America, Europe, Asia, and the Australia and New Zealand
region.
In addition to his role as Non-executive Chair of Collins Foods, Robert is a
Non-executive Director of Magontec Limited and FAR Limited.
He was formerly Non-executive Chair of Spicers Limited and Non-executive
Director of Electro Optic Systems Holdings Limited, UGL Limited, HT&E Limited and
the Chair of the Macular Disease Foundation Australia.
Other current listed directorships
Magontec Limited (July 2013 – current)
FAR Limited (30 June 2021 – current)
Former listed directorships in last 3 years None other than Collins Foods Limited
Special accountabilities
Independent Non-executive Chair
Audit and Risk Committee member
Remuneration and Nomination Committee member
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5 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
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DIRECTORS' REPORT (CONTINUED)
DIRECTOR
Drew O'Malley
Experience and expertise
An accomplished executive with over 20 years’ experience in the Quick Service
Restaurants (QSR) industry, Drew joined Collins Foods after serving nearly two
decades as an executive team member with AmRest, during which time it grew to
become the largest independent restaurant company in Europe.
In his time there, Drew served in various senior roles, including Chief Operating
Officer, Chief Digital Officer, and Brand President KFC. Additionally, Drew served as
President of the Central Europe Division, in which he was responsible for over 500
restaurants across 4 brands (KFC, Pizza Hut, Starbucks and Burger King) and seven
countries.
Prior to his current role as Managing Director and CEO, Drew served three years at
Collins Foods as the Chief Operating Officer for Australia. He has also worked as a
consultant with McKinsey & Company and holds an MBA from the University of
Michigan Business School.
Other current listed directorships
None other than Collins Foods Limited
Former listed directorships in last 3 years None other than Collins Foods Limited
Special accountabilities
Managing Director & CEO
DIRECTOR
Nicki Anderson - B. Business (Marketing), MBA, FAICD
Experience and expertise
Nicki has over 25 years’ experience working in Oceania, Asia, Europe and America
and has hands on leadership experience in strategy, sales, marketing, customer
experience and innovation within the food, beverage, consumer goods and
agribusiness sectors. Her leadership roles include Vice President Innovation at
Cadbury Schweppes Americas (Dr Pepper Snapple) based in New York, Marketing
& Innovation Director for Coca Cola Amatil and McCain Foods and CEO for
Powerforce, Demo Plus, Artel and Retail Facts.
Nicki is currently a Non-executive Director & Chair of Remuneration & Nomination
Committee for ASX listed GrainCorp and Craig Mostyn Group, Deputy Chair &
Chair of Nomination Committee for Australian Made Campaign Limited, and Non-
executive Director for both Fred Hollows Foundation and Prostate Cancer
Foundation of Australia. She is former Chair & Member of the Monash University
Advisory Board for the Marketing faculty.
Nicki holds an Executive MBA from the University of NSW (AGSM), a Bachelor of
Business (marketing major) from the University of Technology Sydney and is a
Fellow of the Australian Institute of Company Directors.
Other current listed directorships
GrainCorp Limited (October 2021)
Former listed directorships in last 3 years Toys ‘R’ Us Limited (25 October 2018 – 31 August 2022)
Select Harvests Limited (21 January 2016 – 25 February 2022)
Health & Plant Protein Group Limited (17 May 2021 – 4 August 2021)
Special accountabilities
Independent Non-executive Director
Audit and Risk Committee member
Remuneration and Nomination Committee member
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 6
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DIRECTORS' REPORT (CONTINUED)
DIRECTOR
Mark Hawthorne - B. Financial Administration, CA, GAICD
Experience and expertise
Mark has extensive experience as an executive that has led franchisee centric
brands in different scenarios including start up, founder led, large multi-national,
private equity ownership in different countries and cultures around the World. His
more than 25 years’ of retail and franchising experience has been gained as the
CEO & Executive Director of Guzman y Gomez (GyG) from 2015 to 2020 and prior
to that, leading McDonalds in various markets including the United Kingdom, New
Zealand and the Middle East and Africa. Mark achieved his Chartered
Accountant qualification in 1997 and is a Graduate of the Australian Institute of
Company Directors’ Company Directors Course.
Other current listed directorships
None other than Collins Foods Limited
Former listed directorships in last 3 years None other than Collins Foods Limited
Special accountabilities
Independent Non-executive Director
Audit and Risk Committee member
Remuneration and Nomination Committee member
DIRECTOR
Christine Holman - PGDipBA, MBA, GAICD
Experience and expertise
Christine is a professional company director and a Non-Executive Director of three
ASX listed boards, AGL Ltd, Metcash Ltd and Collins Foods Ltd, The National
Intermodal Corporation which is a Federal Government Business Enterprise (GBE)
and one private company, Indara Pty Ltd.
Christine also sits on the Boards of non-for-profit organisations, including The
Bradman Foundation, The State Library of NSW Foundation, The McGrath
Foundation and until March 2023, the ICC T20 Cricket World Cup LOC.
In her previous executive capacity, as both CFO & Commercial Director of Telstra
Broadcast Services, Christine brings a deep understanding of legacy and
emerging technologies and digital transformations. During her time in private
investment management, Christine assisted management and the Board of
investee companies on strategy development, mergers & acquisitions, leading
due diligence teams, managing large complex commercial negotiations, and
developing growth opportunities.
Christine has an MBA and Post-Graduate Diploma in Management from
Macquarie University and is a Graduate of the Australian Institute of Company
Directors.
Christine is a member of Chief Executive Women (CEW) and the International
Women’s Forum (IWF).
Other current listed directorships
AGL Limited (15 November 2022 - current)
Metcash Limited (October 2020 – current)
Former listed directorships in last 3 years CSR Limited (October 2016 – 16 November 2022)
Blackmores Limited (March 2019 – July 2021)
Special accountabilities
Independent Non-executive Director
Audit and Risk Committee Chair
Remuneration and Nomination Committee member
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7 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
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DIRECTORS' REPORT (CONTINUED)
DIRECTOR
Kevin Perkins
Experience and expertise
Kevin is a highly experienced executive in the Quick Service Restaurant (QSR) and
casual dining segments of the Australian restaurant industry. He has had more than
40 years’ experience with the Collins Foods Group, having overseen its growth both
domestically and overseas over that time.
Kevin is the Non-executive Chair of Sizzler USA Acquisition, Inc.
Sizzler USA Acquisition, Inc operates or franchises Sizzler restaurants across the
United States and Puerto Rico. The operations of Collins Foods and Sizzler USA
Acquisition, Inc are separate.
Other current listed directorships
None other than Collins Foods Limited
Former listed directorships in last 3 years None other than Collins Foods Limited
Special accountabilities
Non-executive Director
Audit and Risk Committee member
Remuneration and Nomination Committee member
DIRECTOR
Russell Tate - B. Com (Econ.)
Experience and expertise
Russell has more than 33 years’ experience in senior executive and consulting roles
in marketing and media. He was CEO of ASX-listed STW Group Limited, Australia’s
largest marketing communications group from 1997 to 2006, Executive Chair from
2006 to 2008, and Deputy Chair (Non-executive) from 2008 to 2011.
He was Chair (Non-executive) of Collins Foods Limited from its listing in 2011 until
March 2015 and remained Executive Chair of ASX-listed Macquarie Radio Network
Limited (renamed Macquarie Media Limited) from 2009 until 2018 and Non-
executive Chair until November 2019. He is also a Director of One Big Switch Pty Ltd
(since 2012).
Other current listed directorships
None other than Collins Foods Limited
Former listed directorships in last 3 years None other than Collins Foods Limited
Special accountabilities
Independent Non-executive Director
Audit and Risk Committee member
Remuneration and Nomination Committee Chair
Company Secretary
Frances Finucan LLB (Hons), BA (Modern Asian Studies), FGIA, MQLS, GAICD
The Company Secretary, Frances Finucan, was appointed to the role on 17 July 2013. Frances’ experience in legal, commercial
and corporate governance has been gained whilst working in legal, regulatory and company secretarial roles in Australia for
more than 15 years.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 8
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Directors’ report
DIRECTORS' REPORT (CONTINUED)
Meetings of Directors
The numbers of meetings of the Company’s Board of Directors and of each Board Committee held during the FY23 and FY22
years, and the number of meetings attended by each Director, were:
LETTER FROM THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE
Board
Audit and Risk Committee
Remuneration and Nomination
Committee
(1) FY23
meetings
Meetings
attended
(1) FY22
meetings
Meetings
attended
(1) FY23
meetings
Meetings
attended
(1) FY22
meetings
Meetings
attended
(1) FY23
meetings
Meetings
attended
(1) FY22
meetings
Meetings
attended
Dear Shareholders
Robert Kaye SC
Nicki Anderson (2)
Mark Hawthorne (3)
Christine Holman
Bronwyn Morris AM (4)
Kevin Perkins
Russell Tate
Drew O’Malley (5)
15
3
15
15
6
15
15
15
15
3
15
14
6
15
13
14
18
-
4
18
18
18
18
14
18
-
4
18
18
18
17
14
6
2
6
6
2
6
6
-*
6
2
6
5
2
5
4
-*
6
-
2
6
6
6
6
-*
6
-
2
6
6
6
6
-*
5
2
5
5
3
5
5
-*
5
2
5
5
3
4
5
-*
7
-
3
7
7
7
7
-*
7
-
3
7
7
7
7
-*
(1) FY23 and FY22 represents the number of meetings held during the time the Director held office or membership of a Committee during the period.
(2) Appointed as Independent Non-executive Director, member of the Audit and Risk Committee and Remuneration and Nomination Committee
effective 13 January 2023.
(3) Appointed as Independent Non-executive Director, member of the Audit and Risk Committee and Remuneration and Nomination Committee
effective 23 December 2022.
(4) Retired as Independent Non-executive Director effective 2 September 2022.
(5) Appointed Managing Director effective 29 June 2021.
*
Not a member of the relevant Committee.
Following record revenue and underlying earnings before interest, tax and depreciation (EBITDA) in FY21 and FY22, Collins Foods
Limited total group revenues from continuing operations in FY23 increased by 14.1% to $1,348.6 million, total group pre AASB 16
underlying EBITDA fell by 4.6% to $141.4 million, and pre AASB 16 underlying net profit after tax from continuing operations (NPAT) fell
by 9.4% to $57.9 million. Supply chain issues, and significantly higher than expected and budgeted margin pressures, meant that
EBITDA growth targets set at the start of the year within our Short Term Incentive (STI) Plan were not met for KFC Australia, Taco Bell
Australia and total group. As a result, no STI payouts were triggered for Australian based Key Management Personnel (KMP), senior
executives, or support staff.
Our Collins Foods Europe team (CFE), however, did reach and exceed its FY23 EBITDA target which had two components. One
related to ongoing operations which faced even greater difficulties than our Australian team around severe inflation, staffing
shortages, spikes in energy prices and supply chain disruptions. The other related specifically to meeting critical development targets,
set out by Yum!, within the Netherlands Corporate Franchise Agreement (CFA) signed in 2022. Our CFE team led by CEO, Hans Miete,
managed to achieve all four first-year CFA incentive targets, including the construction of three restaurants in December 2022 alone,
and thereby earned maximum incentive payments under the CFA. As further recognition of the efforts of CFE, it was awarded
Franchisee of the Year by the KFC WEBU (Western Europe business unit), a remarkable distinction.
Our STI Plan rules state that no individual division of the company can qualify for STI payouts unless the total group EBITDA target is
also reached. In this case however, the Board has taken the view that the achievements of the CFE team should be recognised and
rewarded and has exercised its discretion to award a target level STI payout to Hans Miete (CEO Europe) and 60% of target level STI
payout to David Timm (CMO), both of whom are KMP based in Amsterdam, and to also make discretionary target level STI payouts to
around 57 CFE Restaurant Support Centre staff and above-store employees in the Netherlands.
Whilst no discretionary STI payouts were requested by, nor will be made to, Australian based KMP or members of the senior executive
team, the board has agreed with senior management that a discretionary STI payout, at 50% of award target level, will also be
granted to 116 Australian Restaurant Support Centre staff and above-store employees for their contribution to earnings results in FY23
– earnings results which did not reach target levels set at the start of the year but which were nevertheless outstanding in the
prevailing market conditions.
With regard to Long Term Incentive (LTI) Plan entitlements for eligible KMP, there will be no vesting during FY24 of performance rights
granted in FY21 for the performance period of FY21, FY22 and FY23. Under the Plan rules, vesting levels are calculated against a table
of annualised compound earnings-per-share growth hurdles across the three year performance period, and the threshold hurdle
level was not met for this FY21 to FY23 performance period.
For FY24 some changes have been made to executive remuneration components and their links to performance outcomes. Full
details of FY24 STI and LTI Plans are set out in the Remuneration Report.
In summary, the STI Plan will measure EBITDA performance against a pre-determined target level and award scale. EBITDA will be the
single performance metric for FY24 STI Plan outcomes. Guest experience survey (GES) results, which have previously determined 15%
of STI performance outcomes, will be temporarily excluded from STI results in FY24 only, while we investigate and trial, in conjunction
with Yum!, alternative and more contemporary customer satisfaction measurement options. It is intended that this very important
metric will return in FY25. With respect to ESG performance, we will continue, in FY24, to apply a downward “modifier” of up to 15% of
STI entitlements earned for EBITDA performance if, in the Board’s view, satisfactory progress has not been maintained towards
reaching 2026 ESG targets. Finally, we have made a small adjustment to STI payout tables which returns the payout threshold to 95%
of EBITDA target, albeit at lower payout levels than previously applied between 95% and 100% of target.
No changes have been made to our LTI Plan. The measurement period for performance rights granted at the start of FY22 ends at
the conclusion of FY24, and for the first time will include a second performance measure of Relative Total Shareholder Return,
contributing a 50% weighting alongside the compound EPS growth measure which has been the sole measure to date.
Whilst the challenges of FY23 have limited our ability to achieve all the growth hurdles we set for ourselves at the start of the year, the
commitment and dedication of the Collins Foods’ team has never wavered and on behalf of the Board and management team I
am delighted to share that we have now launched a new employee Ownership Share Plan targeted at Collins Foods’ Restaurant
Managers and Restaurant Support Centre employees in Australia and Europe. The Plan is in keeping with Collins Foods’ values of
“Ownership” and “People at the Heart”. Eligible employees will receive performance rights over a five year period, aligned to their
role level, of up to a total value of $10,000, providing them with the opportunity to share in the company’s success over the medium
to long term.
Yours sincerely
Russell Tate
Independent Non-executive Director
Chair of the Remuneration and Nomination Committee
Collins Foods Limited
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9 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
DIRECTORS' REPORT (CONTINUED)
LETTER FROM THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE
Directors’ report
Dear Shareholders
Following record revenue and underlying earnings before interest, tax and depreciation (EBITDA) in FY21 and FY22, Collins Foods
Limited total group revenues from continuing operations in FY23 increased by 14.1% to $1,348.6 million, total group pre AASB 16
underlying EBITDA fell by 4.6% to $141.4 million, and pre AASB 16 underlying net profit after tax from continuing operations (NPAT) fell
by 9.4% to $57.9 million. Supply chain issues, and significantly higher than expected and budgeted margin pressures, meant that
EBITDA growth targets set at the start of the year within our Short Term Incentive (STI) Plan were not met for KFC Australia, Taco Bell
Australia and total group. As a result, no STI payouts were triggered for Australian based Key Management Personnel (KMP), senior
executives, or support staff.
Our Collins Foods Europe team (CFE), however, did reach and exceed its FY23 EBITDA target which had two components. One
related to ongoing operations which faced even greater difficulties than our Australian team around severe inflation, staffing
shortages, spikes in energy prices and supply chain disruptions. The other related specifically to meeting critical development targets,
set out by Yum!, within the Netherlands Corporate Franchise Agreement (CFA) signed in 2022. Our CFE team led by CEO, Hans Miete,
managed to achieve all four first-year CFA incentive targets, including the construction of three restaurants in December 2022 alone,
and thereby earned maximum incentive payments under the CFA. As further recognition of the efforts of CFE, it was awarded
Franchisee of the Year by the KFC WEBU (Western Europe business unit), a remarkable distinction.
Our STI Plan rules state that no individual division of the company can qualify for STI payouts unless the total group EBITDA target is
also reached. In this case however, the Board has taken the view that the achievements of the CFE team should be recognised and
rewarded and has exercised its discretion to award a target level STI payout to Hans Miete (CEO Europe) and 60% of target level STI
payout to David Timm (CMO), both of whom are KMP based in Amsterdam, and to also make discretionary target level STI payouts to
around 57 CFE Restaurant Support Centre staff and above-store employees in the Netherlands.
Whilst no discretionary STI payouts were requested by, nor will be made to, Australian based KMP or members of the senior executive
team, the board has agreed with senior management that a discretionary STI payout, at 50% of award target level, will also be
granted to 116 Australian Restaurant Support Centre staff and above-store employees for their contribution to earnings results in FY23
– earnings results which did not reach target levels set at the start of the year but which were nevertheless outstanding in the
prevailing market conditions.
With regard to Long Term Incentive (LTI) Plan entitlements for eligible KMP, there will be no vesting during FY24 of performance rights
granted in FY21 for the performance period of FY21, FY22 and FY23. Under the Plan rules, vesting levels are calculated against a table
of annualised compound earnings-per-share growth hurdles across the three year performance period, and the threshold hurdle
level was not met for this FY21 to FY23 performance period.
For FY24 some changes have been made to executive remuneration components and their links to performance outcomes. Full
details of FY24 STI and LTI Plans are set out in the Remuneration Report.
In summary, the STI Plan will measure EBITDA performance against a pre-determined target level and award scale. EBITDA will be the
single performance metric for FY24 STI Plan outcomes. Guest experience survey (GES) results, which have previously determined 15%
of STI performance outcomes, will be temporarily excluded from STI results in FY24 only, while we investigate and trial, in conjunction
with Yum!, alternative and more contemporary customer satisfaction measurement options. It is intended that this very important
metric will return in FY25. With respect to ESG performance, we will continue, in FY24, to apply a downward “modifier” of up to 15% of
STI entitlements earned for EBITDA performance if, in the Board’s view, satisfactory progress has not been maintained towards
reaching 2026 ESG targets. Finally, we have made a small adjustment to STI payout tables which returns the payout threshold to 95%
of EBITDA target, albeit at lower payout levels than previously applied between 95% and 100% of target.
No changes have been made to our LTI Plan. The measurement period for performance rights granted at the start of FY22 ends at
the conclusion of FY24, and for the first time will include a second performance measure of Relative Total Shareholder Return,
contributing a 50% weighting alongside the compound EPS growth measure which has been the sole measure to date.
Whilst the challenges of FY23 have limited our ability to achieve all the growth hurdles we set for ourselves at the start of the year, the
commitment and dedication of the Collins Foods’ team has never wavered and on behalf of the Board and management team I
am delighted to share that we have now launched a new employee Ownership Share Plan targeted at Collins Foods’ Restaurant
Managers and Restaurant Support Centre employees in Australia and Europe. The Plan is in keeping with Collins Foods’ values of
“Ownership” and “People at the Heart”. Eligible employees will receive performance rights over a five year period, aligned to their
role level, of up to a total value of $10,000, providing them with the opportunity to share in the company’s success over the medium
to long term.
Yours sincerely
Russell Tate
Independent Non-executive Director
Chair of the Remuneration and Nomination Committee
Collins Foods Limited
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 10
Directors’ report
REMUNERATION REPORT
Persons covered by this Remuneration Report
The following outlines the policy that applies to KMP Executives whose remuneration is structured taking into consideration the
This Remuneration Report covers the remuneration of Non-executive Directors, the Managing Director & CEO and employees
(KMP Executives) who have authority and accountability for planning, directing and controlling the activities of the
consolidated entity (collectively, KMP). Further biographical information regarding KMP, is set out in either the “Director
Information” section of the Director’s Report or www.collinsfoods.com. The roles and individuals addressed in this report are set
out below.
Name
Title
Robert Kaye SC
Independent Non-executive Chair, Audit and Risk Committee member, Remuneration and Nomination Committee member
the Group’s key principles governing the remuneration framework and application;
the level and structure of remuneration elements offered to executives of other publicly listed Australian companies with
similar financial and operational attributes;
•
the position and accountabilities of each KMP Executive;
• market-based benchmarks reflecting the structure and level of reward and alignment to KMP performance;
Nicki Anderson (1)
Independent Non-executive Director, Audit and Risk Committee member, Remuneration and Nomination Committee member
the need to strike an appropriate balance between short term and long term incentives;
Mark Hawthorne
Independent Non-executive Director, Audit and Risk Committee member, Remuneration and Nomination Committee member
internal relativities and external market factors that require consideration having regard to individual contributions and
Christine Holman
Independent Non-executive Director, Audit and Risk Committee Chair, Remuneration and Nomination Committee member
shareholder expectations;
Bronwyn Morris AM (2)
Independent Non-executive Director, Audit and Risk Committee Chair, Remuneration and Nomination Committee member
Kevin Perkins
Russell Tate
Non-executive Director, Audit and Risk Committee member, Remuneration and Nomination Committee member
Independent Non-executive Director, Audit and Risk Committee member, Remuneration and Nomination Committee Chair
Drew O’Malley
Managing Director & Chief Executive Office (Managing Director & CEO)
fixed remuneration policy guidelines set with reference to relevant market practices;
remuneration should be reviewed annually and be made up of:
− Base Salary being salary and superannuation;
Executive remuneration
following factors:
Directors’ report
Remuneration rEport
Hans Miete
CEO – Collins Foods Europe Ltd (CEO – CF Europe)
Nigel Williams (3)
Group Chief Financial Officer (Group CFO)
Dawn Linaker
Helen Moore
David Timm
Chief People Officer (CPO)
Chief Operating Officer – KFC Australia (COO – KFC Australia)
Chief Marketing Officer (CMO)
(1) Appointed Independent Non-executive Director effective 13 January 2023.
(2) Retired as Independent Non-executive Director effective 2 September 2022.
(3) Announced resignation as Group Chief Financial Officer effective 14 July 2023.
Overview of Remuneration Governance Framework and Strategy
The performance of the Group is contingent upon the calibre of its Directors and Executives. The Remuneration and Nomination
Committee (RNC) is accountable for making recommendations to the Board on the Group’s remuneration framework.
Total Reward (TR) which represents the sum of the above elements consisting of TFR, an annual incentive (STI) and a long
term incentive (LTI) having regard to market practice, internal relativity and key drivers of shareholder returns;
The framework has been developed to support the following key principles:
• enable the Company to attract and retain capable and experienced Directors and Executives who create value for
shareholders;
•
reward the achievement of both annual and long term performance objectives appropriate to the Company's
circumstances and goals;
•
transparency;
• demonstrate a clear relationship between performance and remuneration;
• motivate the KMP Executives to pursue sustainable growth and innovation aligned with shareholder’s interests;
• have a key focus on prevailing market conditions; and
•
reward all levels of staff, reflecting both equity of treatment and fairness to shareholders.
In carrying out its accountabilities, the RNC is authorised to obtain external professional advice as it determines necessary. As at
the end of the reporting period, the RNC was comprised of Non-executive Directors only, with a majority being independent.
The role and accountabilities of the committee are outlined in the RNC Charter, available on the Company’s website together
with other remuneration governance policies.
The Board has ultimate accountability for signing off on remuneration policies, practices and outcomes.
The RNC operated in accordance with the aims and aspirations of the ASX Corporate Governance Council's Corporate
Governance Principles and Recommendations (Principles and Recommendations) and seeks input regarding remuneration
governance from a wide range of sources. These include shareholders, RNC members, stakeholder groups including proxy
advisors, external remuneration consultants, other experts and professionals such as tax advisors and lawyers and Company
management to understand roles and issues facing the Company.
A review of the remuneration framework to accepted market practices and current best practices will be conducted during
FY24 with any changes anticipated to apply from FY25.
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11 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
•
•
•
•
•
•
−
−
−
− Other Benefits being any cash benefits beyond Base Salary, allowances (such as car allowance), any applicable non-
cash fringe benefits (such as the payment of health insurance premiums on behalf of the employee) and salary sacrifice
arrangements, but excluding leave entitlements and short term and long term incentive rewards as below;
Total Fixed Remuneration (TFR) the sum total of Base Salary and Other Benefits;
− Short Term Incentive (STI) which provides a cash reward for performance outcomes compared to agreed annual
objectives;
Long Term Incentive (LTI) which provides an equity-based reward reflective of meeting shareholder aligned reward by
way of compound earnings per share growth over a three year performance period (Compound EPS Growth) (50% of
the award) and growth in Relative Total Shareholder Returns (Relative TSR) over the same three year performance period
(50% of the award). Annual awards under the LTI program are not linked to the annual incentive;
•
TR should be structured with reference to market practice and the setting in which the Company operates in various
regional and global markets, having regard to both short and longer term economic and performance factors;
•
TR will be managed within a range that allows for the recognition of both company and individual performance while
contributing to the organisation’s ability to retain and attract individuals with appropriate skills and experience to meet the
organisation’s goals;
required, attracted to, the business;
• exceptions will be managed separately to ensure that individuals with particular expertise are retained in, and where
•
termination benefits will generally be limited to the default amount that may be provided for without shareholder approval,
as allowed for under the Corporations Act, and will be specified in employment contracts.
REMUNERATION POLICY AND LINK TO PERFORMANCE
The executive remuneration framework components and their links to performance outcomes are outlined below:
Remuneration
Purpose
Performance metrics FY23
Potential value
Considerations for FY24
component
Total Fixed
To provide
Nil
Remuneration
competitive market
Positioned to reflect the market rate and
Reviewed in line with market positioning
individual attributes
salary including
superannuation
and Other Benefits
STI
Rewards for annual
• EBITDA (pre AASB 16) performance
• All KMP Executives: 50% of Base Salary
• EBITDA (pre AASB 16) performance
performance
against a pre-determined target level
for target performance, with a
against a pre-determined target level
and award scale
maximum opportunity of up to 75% of
and award scale weighted at 100%
• Improvement to Guest Experience
Base Salary
for FY24 only
Survey (GES) results against pre-
• EBITDA targets must be at least equal
• Reintroduction of overriding hurdle of
determined target levels
to prior period reported EBITDA
(comparison to be undertaken by an
independent third party as part of a full
remuneration framework review to
occur)
greater than 95% of target EBITDA to
trigger any STI payment with reduced
payout scale for EBITDA between 95-
100% of target EBITDA
• ESG applied as a modifier to STI,
where up to 15% of STI is at risk for non-
achievement of ESG related activities
• EBITDA target must be at least equal
to prior period reported EBITDA
• From FY25, the EBITDA target will be on
a post AASB 16 basis
• Weighting between the two metrics is
85% EBITDA performance and 15%
GES improvement
• Australian ESG initiatives (ESG) applied
as a modifier to STI where up to 15% of
STI is at risk for non-achievement of
ESG related activities
• Achievement of the EBITDA target is
an overriding hurdle to trigger any STI
payment
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Page 1122 of 97
REMUNERATION REPORT (CONTINUED)
Executive remuneration
Directors’ report
Remuneration rEport
The following outlines the policy that applies to KMP Executives whose remuneration is structured taking into consideration the
following factors:
•
•
the Group’s key principles governing the remuneration framework and application;
the level and structure of remuneration elements offered to executives of other publicly listed Australian companies with
similar financial and operational attributes;
•
the position and accountabilities of each KMP Executive;
• market-based benchmarks reflecting the structure and level of reward and alignment to KMP performance;
•
•
•
•
•
•
the need to strike an appropriate balance between short term and long term incentives;
internal relativities and external market factors that require consideration having regard to individual contributions and
shareholder expectations;
fixed remuneration policy guidelines set with reference to relevant market practices;
remuneration should be reviewed annually and be made up of:
− Base Salary being salary and superannuation;
− Other Benefits being any cash benefits beyond Base Salary, allowances (such as car allowance), any applicable non-
cash fringe benefits (such as the payment of health insurance premiums on behalf of the employee) and salary sacrifice
arrangements, but excluding leave entitlements and short term and long term incentive rewards as below;
−
Total Fixed Remuneration (TFR) the sum total of Base Salary and Other Benefits;
− Short Term Incentive (STI) which provides a cash reward for performance outcomes compared to agreed annual
objectives;
−
−
Long Term Incentive (LTI) which provides an equity-based reward reflective of meeting shareholder aligned reward by
way of compound earnings per share growth over a three year performance period (Compound EPS Growth) (50% of
the award) and growth in Relative Total Shareholder Returns (Relative TSR) over the same three year performance period
(50% of the award). Annual awards under the LTI program are not linked to the annual incentive;
Total Reward (TR) which represents the sum of the above elements consisting of TFR, an annual incentive (STI) and a long
term incentive (LTI) having regard to market practice, internal relativity and key drivers of shareholder returns;
TR should be structured with reference to market practice and the setting in which the Company operates in various
regional and global markets, having regard to both short and longer term economic and performance factors;
TR will be managed within a range that allows for the recognition of both company and individual performance while
contributing to the organisation’s ability to retain and attract individuals with appropriate skills and experience to meet the
organisation’s goals;
• exceptions will be managed separately to ensure that individuals with particular expertise are retained in, and where
required, attracted to, the business;
•
termination benefits will generally be limited to the default amount that may be provided for without shareholder approval,
as allowed for under the Corporations Act, and will be specified in employment contracts.
REMUNERATION POLICY AND LINK TO PERFORMANCE
The executive remuneration framework components and their links to performance outcomes are outlined below:
Remuneration
component
Total Fixed
Remuneration
Purpose
Performance metrics FY23
Potential value
Considerations for FY24
Nil
To provide
competitive market
salary including
superannuation
and Other Benefits
Positioned to reflect the market rate and
individual attributes
Reviewed in line with market positioning
(comparison to be undertaken by an
independent third party as part of a full
remuneration framework review to
occur)
STI
Rewards for annual
performance
• EBITDA (pre AASB 16) performance
• All KMP Executives: 50% of Base Salary
• EBITDA (pre AASB 16) performance
against a pre-determined target level
and award scale
• Improvement to Guest Experience
Survey (GES) results against pre-
determined target levels
• Weighting between the two metrics is
85% EBITDA performance and 15%
GES improvement
• Australian ESG initiatives (ESG) applied
as a modifier to STI where up to 15% of
STI is at risk for non-achievement of
ESG related activities
• Achievement of the EBITDA target is
an overriding hurdle to trigger any STI
payment
for target performance, with a
maximum opportunity of up to 75% of
Base Salary
against a pre-determined target level
and award scale weighted at 100%
for FY24 only
• EBITDA targets must be at least equal
to prior period reported EBITDA
• Reintroduction of overriding hurdle of
greater than 95% of target EBITDA to
trigger any STI payment with reduced
payout scale for EBITDA between 95-
100% of target EBITDA
• ESG applied as a modifier to STI,
where up to 15% of STI is at risk for non-
achievement of ESG related activities
• EBITDA target must be at least equal
to prior period reported EBITDA
• From FY25, the EBITDA target will be on
a post AASB 16 basis
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 12
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
Remuneration
component
LTI
Purpose
Performance metrics FY23
Potential value
Considerations for FY24
Reward for
contribution of
shareholder value
over the longer
term
• Three year compound earnings per
• Managing Director & CEO: 50% of
share growth performance
• Three year Relative Total Shareholder
Return against an ASX200 index
• Weighting between the two hurdles
will be EPS 50% and TSR 50%
Base Salary for target performance,
with a maximum opportunity of 100%
of Base Salary
• Other KMP Executives: 40% of Base
Salary for target performance, with a
maximum opportunity of up to 80% of
Base Salary
• No changes in entitlement levels for
Managing Director & CEO or other
KMP Executives expected for FY24
FIXED REMUNERATION
TFR consists of salary, superannuation contributions and other benefits. Fringe benefits tax on these benefits, where required, is
incorporated in TFR.
The Group aims to position KMP Executives generally in the third quartile of benchmarked companies’ remuneration levels and
above market average, with flexibility to take into account capability, experience, and current and future value to the
organisation.
Fixed remuneration for KMP Executives is reviewed annually or on promotion and is benchmarked against market data for
comparable roles in the market with entities of a similar size. There is no guaranteed increase to fixed remuneration included in
any KMP Executive’s contract.
VARIABLE REMUNERATION
SHORT TERM INCENTIVE PLAN (STIP)
Incentives under the Group’s STIP are at risk components of remuneration provided in the form of cash.
The STIP entitles KMP Executives to earn an annual cash reward payment if predefined targets are achieved. The level of the
incentive is set with reference to role accountabilities and Group performance.
All KMP Executives were offered a target based STI opportunity equivalent to 50% of Base Salary for target performance, with a
maximum opportunity of up to 75% of Base Salary.
Short term incentive performance metrics
FY23 and FY24 STIP
The Board determined that, for FY23, two metrics were to be used to determine awards under the Company’s STIP – EBITDA and
Guest Experience Survey (GES). For FY23, a minimum hurdle criterion of 100% of EBITDA as measured against the Company
Group level was required for further eligibility to participate in the STIP. EBITDA calculations for the purpose of calculating
incentives payable under the STIP continue to be assessed on a pre AASB 16 basis. The GES measure was introduced as a
secondary measure in FY19 reflecting the Group’s core belief that continued improvement in customer experiences with our
brands and our people will underpin our potential for future growth.
The GES is currently the global KFC and Taco Bell measure of real customer experiences. It directly relates to customer feedback
targeting executional areas such as food quality, speed of service, hospitality, cleanliness and maintenance of facilities. The
GES program is currently the franchisor’s global barometer of executional excellence and is administered by an independent
third party provider engaged by the Franchisor.
As a result of its annual review of the remuneration framework in FY23 and in recognition of changes to the method by which
customer experience data is provided to businesses (for example, multiple e-commerce channels), the Board has now
determined that it is appropriate to consider more relevant methods of measuring real customer experiences and during FY24
will investigate and trial, in conjunction with Yum!, alternative customer satisfaction measurement options to be used from FY25.
As a result, and for the FY24 period only, EBITDA will be the sole metric for the STI plan.
The Environmental Social Governance (ESG) metric that was introduced for FY22 was removed for FY23, as the Board
determined that it would be applied as a modifier of up to 15% of the STI opportunity and at risk should satisfactory progress not
be made towards reaching the 2026 ESG targets. This modifier will remain for FY24.
Collins Foods’ 2023 Sustainability Report sets out its Positive Impact Strategy that is structured around three key pillars related to
its Australian operations: People and Communities, Planet and Governance with three primary goals to be achieved by 2026:
• establish Collins Foods Giving as best-in-class signature program with 75% plus enrolment compared to FY21;
•
•
reduce our carbon footprint by achieving a 25% reduction in greenhouse gas emissions compared to FY21;
increase diversion of waste from landfill by 25% compared to FY22.
Impact of non-financial performance
The Board has the discretion to withdraw in full or adjust downwards, STI and LTI outcomes, in the event of mismanagement or
failures in governance, risk management, regulatory compliance, conduct and behaviours that breach the Collins Foods Group
Code of Conduct, which the Board deems may have had a deleterious effect on the Collins Foods brand, reputation,
employees, customers and shareholder value. Examples of failures include, but are not limited to wage non-compliance,
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13 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
employee visa non-compliance, qualified internal audit reports noting material control failures, food safety, employee and
customer safety, taxation, regulatory notices of non-compliance.
Maximum opportunity: EBITDA result
The FY23 award scale based upon the actual EBITDA result achieved is set out below:
STANDARD % PAYOUT TABLE
% EBITDA target achieved
% target bonus earned
100
101
102
103
104
105
106
107
108
109
110
100
108
115
123
128
133
138
143
145
148
150
Maximum opportunity: GES result
The FY23 award scale based upon the actual GES results achieved is set out below:
STANDARD % PAYOUT TABLE
% GES target achieved
% target bonus earned
100
101
102
103
104
105
100
110
120
130
140
150
The FY24 award scale based upon the actual EBITDA result achieved (together with prior payout scales for comparison) is set
out below:
STANDARD % PAYOUT TABLE
% EBITDA target achieved
% target bonus earned
FY18 – FY21
% target bonus earned
FY22 – FY23
% target bonus earned
FY24
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
–
20
40
60
80
100
105
110
115
120
125
130
135
140
145
150
–
–
–
–
–
100
108
115
123
128
133
138
143
145
148
150
–
10
25
40
55
100
105
110
115
120
125
130
135
140
145
150
Delivery method for STI
Calculations are performed and payments made following the end of the measurement period and the external audit of the
Group’s annual audited financial report. Payments are made with PAYG deducted.
Board discretion
STI Plan rules state that no individual division of the Group or its KMP qualify for STI payouts unless the total Group EBITDA target is
reached. Whilst the Group target was not reached in FY23, the Board has exercised its discretion to recognise the performance
of Collins Foods Europe in relation to its implementation and achievement of performance milestones associated with the CFA
in the Netherlands.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 14
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
Accordingly, STI payments have been granted to the CEO – CF Europe and CMO. The STI reward for the CMO did not include
any payment related to Taco Bell.
Forfeiture
STI is forfeited in the event of cessation of employment due to dismissal for cause, for reasons other than for cause and where
the employee terminates their employment prior to the actual payment of the STI, fraud, defalcation, or gross misconduct by
the participant.
LONG TERM INCENTIVE PLAN (LTIP)
Currently, the LTIP is an annually offered at risk equity component of remuneration for KMP Executives and nominated senior
Executives ensuring that their interests in enhancing the mid to longer term growth potential of the Company are aligned with
the interests of shareholders.
Long Term Incentive Performance metrics
Form of equity
The LTIP is in the form of a performance rights plan. Rights awarded are subject to three year performance hurdles and service
vesting conditions. The performance rights confer the right (following valid conversion) to the value of a share at the time, either
settled in shares that may be issued or settled in the form of cash at the discretion of the Board (a feature intended to ensure
appropriate outcomes in the case of separation). There is no entitlement to dividends during the measurement period.
LTI value
The Board retains discretion to determine the value of LTI to be offered each reporting period, subject to shareholder approval
in relation to Directors.
For performance rights to be granted in FY24 with a performance period including FY24, FY25 and FY26, the number of
performance rights granted will be based upon a dollar value divided by the volume weighted average share price (VWAP)
five trading days before and five trading days after the announcement of the Company’s audited financial results. This VWAP
basis of measurement is consistent with prior year.
Measurement period
The measurement period will include three reporting periods unless otherwise determined by the Board. Measurement periods
of three years combined with annual grants will produce overlapping cycles that will promote a focus on producing long term
sustainable performance/value improvement and mitigates the risk of manipulation and short-termism.
The measurement period for FY23 offers commenced 2 May 2022 and ends 27 April 2025 for the performance period of FY23,
FY24 and FY25. The measurement period for FY24 offers commences on 1 May 2023 and ends 3 May 2026 for the performance
period of FY24, FY25 and FY26.
Vesting conditions
The Board has discretion to set vesting conditions for each offer. Performance rights that do not vest will lapse.
FY23 and FY24 offers
Consistent with FY22, a second performance condition of Relative TSR is included for the FY23 grant under the LTIP.
Compound EPS growth will be measured by calculating the compound growth in the Company’s underlying (pre AASB 16)
basic EPS over the performance period. The underlying (pre AASB 16) basic EPS is disclosed in the Operating and Financial
Review of the Directors Report within the Group’s annual audited financial reports and will continue as a performance measure
under the LTIP. The weighting for the EPS hurdle is 50% of the total award.
The Board retains a discretion to adjust the EPS performance condition to ensure that participants are not penalised nor
provided with a windfall benefit arising from matters outside of management’s control that affect EPS (for example, excluding
one-off non-recurrent items or the impact of significant acquisitions or disposals).
The threshold and target EPS growth hurdles remain unchanged from FY22. No changes to the LTIP measures or targets,
thresholds or award scales are intended for FY24.
The following vesting scale applied to the performance rights offered in FY23 and will apply to performance rights offered in
FY24:
Performance Level
Stretch/Maximum
Between Target and Stretch
Target
Between Threshold and Target
Threshold
Below Threshold
Annualised EPS growth (CAGR)
% of max/ stretch/ grant vesting
16.5%
>11%, <16.5%
11%
>5.5%, <11%
5.5%
<5.5%
100%
Pro-rata
50%
Pro-rata
25%
0%
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15 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
The TSR hurdle is based on a VWAP benchmark of ten trading days either side of the 2022 results announcement on 28 June
2022. Measurement will be against the VWAP benchmark ten days either side of the announcement of our financial results in
late June 2025. The Board has determined that the ASX 200 Index is sufficiently broad to measure relativity from the start of the
performance period (2 May 2022). The weighting for the TSR hurdle is 50% of the total award.
Relative TSR performance will be tested at the same time as Compound EPS Growth in accordance with the following vesting
schedule:
Relative TSR of Collins Foods Limited
Proportion of performance rights to vest
At or above the 75th percentile
100%
Between the 50th percentile and 75th percentile
3% for each 1% > 50%, < 75%
At the 50th percentile
Below the 50th percentile
25%
0%
Retesting
The plan rules do not contemplate retesting and therefore retesting is not a feature of the Company’s current LTIP offers.
Amount payable for performance rights
No amount is payable for performance rights. The value of rights is included in assessments of remuneration benchmarking and
policy positioning.
Conversion of vested performance rights
Under the plan rules, the conversion of performance rights to shares occurs automatically upon vesting conditions being
declared by the Board as having been met, except where the Board exercises its discretion to settle in the form of cash. Vesting
is determined following receipt of the audited accounts for the relevant performance periods.
No amount is payable by participants to exercise vested performance rights in respect of any grants.
Disposal restrictions and other related matters
The Company may impose a mandatory holding lock on the shares or a participant may request they be subject to a voluntary
holding lock.
Performance rights are not entitled to receive a dividend. Any shares issued or transferred to a participant upon vesting of
performance rights are only entitled to dividends if they were issued on or before the relevant dividend record date.
Shares issued or transferred under the LTIP rank equally in all respects with other shares on issue.
In the event of a capital reconstruction of the Company (consolidation, subdivision, reduction, cancellation or return), the terms
of any outstanding performance rights will be amended by the Board to the extent necessary to comply with the listing rules at
the time of reconstruction.
Any bonus issue of securities by way of capitalisation of profits, reserves or share capital account will confer on each
performance right, the right:
•
to receive on exercise or vesting of those performance rights, not only an allotment of one share for each of the
performance rights exercised or vested but also an allotment of the additional shares and/or other securities the employee
would have received had the employee participated in that bonus issue as a holder of shares of a number equal to the
shares that would have been allotted to the employee had they exercised those Incentives or the performance rights had
vested immediately before the date of the bonus issue; and
•
to have profits, reserves or share premium account, as the case may be, applied in paying up in full those additional shares
and/or other securities.
Subject to a reconstruction or bonus issue, performance rights do not carry the right to participate in any new issue of securities
including pro-rata issues.
Performance rights will not be quoted on ASX. The Company will apply for quotation of any shares issued under the LTIP.
Cessation of employment
In the event of cessation of employment within 12 months of the date of grant, unvested performance rights are forfeited. In the
event of cessation of employment after 12 months but before the conclusion of the vesting period, unvested performance rights
are considered forfeited, unless otherwise determined by the Board, in which case any service condition will be deemed to
have been fulfilled as at the testing date and the performance rights remain subject to performance testing along with other
participants. It is noted that the Board has discretion to allow “Good Leavers” to retain their participation in the LTIP beyond the
date of cessation of employment when deemed appropriate to the circumstances.
Change of control of the Company
If in the opinion of the Board a change of control event has occurred, or is likely to occur, the Board may declare a
performance right to be free of any vesting conditions and, if so, the Company must issue or transfer shares in accordance with
the LTIP rules. In exercising its discretion, the Board will consider whether measurement of the vesting conditions (on a pro-rata
basis) up to the date of the change of control event is appropriate in the circumstances.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 16
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
MIX OF BASE SALARY AND INCENTIVES BASED REMUNERATION AND PROPORTIONALITY
The Board continually reviews the remuneration mix for the Managing Director & CEO and other KMP Executives. As such, there
were increases in other KMP Executives LTI vesting rates in FY22, with no changes to the Managing Director & CEO’s
remuneration mix. The remuneration mix for FY23 is consistent with FY22.
The following table shows the range of remuneration mix that was offered for current KMP Executives during FY23, for target
performance.
Mix of remuneration
(excludes Other Benefits) (1)
Base Salary
STI (at Target performance)
LTI (at Target performance)
Managing Director & CEO
Other KMP Executives
50%
25%
25%
53%
26%
21%
(1) The FY22 increase in LTI vesting rates was not applied to Helen Moore (COO – KFC Aust) in FY22, however, has been applied in FY23.
The Board considers that the remuneration mix for the Managing Director & CEO and other KMP Executives (Base Salary, STI and
LTI) in FY23 resulted in appropriately weighted remuneration to:
• align executive remuneration practices with accepted market practices and current best-practices;
• motivate executives to continuously grow shareholder value by aligning their interests with those of shareholders through
equity ownership; and
• manage the risk of short-termism inherent in fixed remuneration and short-term incentives by exposing a significant
proportion of remuneration to the longer term consequences of decision making.
There are no changes for the mix of Base Salary, STI and LTI for FY24 for the Managing Director & CEO and other KMP Executives.
As indicated above, a review of the remuneration framework to accepted market practices and current best practices will be
conducted during FY24 with the assistance of an independent third party with any changes anticipated to apply from FY25.
Company performance
The Company’s performance during the reported period and the previous four reporting periods in accordance with the
requirements of the Corporations Act follow:
FY end date
Revenue
Profit after tax
Share price
FY23
FY22
FY21
FY20
FY19
($m)
($m)
(2) $1,348.61
(2) $11.28
(2) $1,181.70
(2) $54.08
(3) $1,065.90
(4) $32.61
$981.73
$901.22
(5) $31.26
(6) $39.11
$8.69
$10.15
$11.37
$6.94
$7.59
Change in
share price
($1.46)
($1.22)
$4.43
($0.65)
$2.24
(1) Dividends used are the cash amount (post franking).
(2) Excludes Sizzler Asia revenues and profit after tax.
(3) Excludes Sizzler Australia revenues.
Short term change in
shareholder value over 1 year
(SP change + dividends)
Long term (cumulative)
3 years change in shareholder
value
(1) Dividends
Amount
%
Amount
%
$0.270
$0.245
$0.210
$0.200
$0.180
($1.19)
($0.98)
$4.64
($0.45)
$2.42
(12%)
(9%)
67%
(6%)
45%
$2.48
$3.22
$6.61
$2.24
$4.08
36%
42%
124%
43%
101%
(4) FY21 restated as a result of a change in accounting policy for the recognition of cloud computing arrangements.
(5)
Includes the impact of AASB 16.
(6) Excludes the impact of AASB 16.
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17 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Statutory Remuneration disclosures for FY23
KMP EXECUTIVE REMUNERATION
Directors’ report
Remuneration rEport
The following table outlines the remuneration received by KMP Executives of the Company during FY23 and FY22 prepared
according to statutory disclosure requirements and applicable accounting standards.
KMP Executive remuneration for FY23 (with FY22 comparatives) is reported in four components being Base Salary (including
superannuation), Other Benefits, awarded values of STI and awarded values of LTI remuneration.
Name
Role(s)
Year
Base salary
(incl. super)
Other
benefits
Total fixed
remun-
eration
Short Term Incentive
(1) Long Term Incentive
Amount % of Total
Reward
Amount % of Total
Reward
(2) Total
Reward
(3) Change in
accrued
leave
Termination
benefits
Drew
O'Malley MD & CEO
Hans
Miete (4)
CEO - CF
Europe
Nigel
Williams
Group
CFO
Dawn
Linaker
CPO
Helen
Moore (5)
COO –
KFC Aust
David
Timm (6) (7)
CMO
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
$918,825
$37,172
$955,997
–
0% ($120,702)
(14%)
$835,295
$8,405
$858,537
$37,050
$895,587
$434,139
26%
$357,304
22%
$1,687,030
($36,727)
$425,504
$36,804
$462,308
$213,505
29%
$54,137
$404,014
$36,378
$440,392
$310,869
38%
$67,654
7%
8%
$729,950
$17,489
$818,915
$24,094
–
–
–
–
$611,148
$40,765
$651,913
–
0%
($21,682)
(3%)
$630,231
($18,723)
(8)175,381
$595,954
$40,035
$635,989
$301,402
27%
$182,938
16%
$1,120,329
$568
$496,480
$38,573
$535,053
–
0%
($16,511)
(3%)
$518,542
($13,694)
$453,751
$38,386
$492,137
$229,516
27%
$136,919
$507,375
$27,884
$535,259
–
0%
$65,763
$419,871
$23,701
$443,572
$213,044
30%
$63,569
$436,517
$119,324
19%
$59,403
16%
11%
9%
10%
$858,572
$1,240
$601,022
($1,690)
$720,185
$7,253
$615,244
($11,600)
$147,236
$71,377
32%
$7,166
3%
$225,779
$11,600
$436,517
$147,236
–
–
–
–
–
–
–
–
–
(1) The LTI value reported in this table is the amortised accounting charge of all grants that were not lapsed or vested at the start of the reporting period measured in
accordance with AASB 2 Share-based Payment. Where a market-based measure of performance is used such as TSR, no adjustments can be made to reflect actual
LTI vesting. However, in relation to non-market conditions, such as EPS, adjustments must be made to ensure the accounting charge matches the number vested.
(2) Excludes change in accrued leave balance.
(3) The changes in accrued leave are measured in accordance with AASB 119 Employee Benefits.
(4) FY23 salary converted at exchange rate of AUD $1: EURO €0.6516 (FY22: AUD $1: EURO €0.6393).
(5) Appointed Chief Operating Officer – KFC Australia effective 25 June 2021.
(6) Appointed Chief Marketing Officer effective 1 January 2022.
(7) FY23 salary converted at exchange rate of AUD $1: GBP £0.5657 (FY22: AUD $1: GBP £0.5501).
(8) Termination benefits are accrued obligations as at 30 April 2023. The Group CFO resignation is effective 14 July 2023.
Both target and awarded values of STI and LTI remuneration are outlined in the relevant sections of the Remuneration Report to
assist shareholders to obtain a more complete understanding of remuneration as it relates to KMP Executives.
KMP EXECUTIVE REMUNERATION OPPORTUNITY FOR FY23 (NON-STATUTORY DISCLOSURE)
The following table is provided to shareholders as an illustration of the remuneration that was offered to KMP Executives for
target performance during FY23. It should be noted that the table presents target incentive opportunities for achieving a
challenging but achievable target level of performance. In the case of STI, the maximum incentive may be up to 50% higher
(i.e. 75% of Base Salary). The maximum LTI is 100% of Base Salary for the Managing Director & CEO and 80% of Base Salary for
KMP Executives.
Name
Role(s)
(1) Base
Salary
(incl.
super)
Base
Salary as a
% of Total
Reward
Short Term Incentive opportunity
Long Term Incentive opportunity
Target %
of Base
Salary
Target STI
amount
STI %
of Total
Reward
Target %
of Base
Salary
Target LTI
amount
LTI %
of Total
Reward
Other
benefits
Total
Reward
Drew O'Malley MD & CEO
$918,825
Hans Miete
CEO - CF Europe
€278,250
Nigel Williams
Group CFO
$611,148
Dawn Linaker
CPO
$465,386
Helen Moore
COO – KFC Aust.
$507,375
David Timm
CMO
£225,000
51%
55%
54%
55%
54%
53%
50%
$459,413
50%
€139,125
50%
$305,574
50%
$232,693
50%
$253,688
50%
£112,500
25%
25%
25%
25%
26%
26%
50%
$459,412
40%
€111,300
40%
$244,459
40%
$186,154
40%
$202,950
40%
£90,000
25%
20%
20%
20%
20%
21%
$37,172
$1,874,822
€23,982
€552,657
$40,765
$1,201,946
$38,573
$922,806
$27,884
$991,897
–
£427,500
(1) Base Salary based on a 52 week period (FY22: 52 week period).
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Page 1188 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 18
REMUNERATION REPORT (CONTINUED)
Performance outcomes for FY23 and FY22 including STI and LTI assessment
Directors’ report
Remuneration rEport
SHORT TERM INCENTIVES
The tables below set out details of STI and LTI performance outcomes for FY23 and FY22 when compared to target.
Name
Role
KPI summary
Average
weighting
Average
GES target
EBITDA
target
% of target
achieved
Awarded
Total STI award
(EBITDA, GES & ESG)
FY23 Company level KPI Summary
Award outcomes
FY23 paid FY24
Drew O'Malley
Managing
Director & CEO
EBITDA
GES
Hans Miete
CEO – CF Europe EBITDA
ESG (STI modifier) (1)
GES
DISCRETIONARY (2)
Nigel Williams
Group CFO
EBITDA
Dawn Linaker
CPO
GES
ESG (STI modifier) (1)
EBITDA
GES
ESG (STI modifier) (1)
Helen Moore
COO – KFC Aust
EBITDA
David Timm
CMO
GES
ESG (STI modifier) (1)
EBITDA
GES
DISCRETIONARY (3)
85%
15%
85%
15%
85%
15%
85%
15%
85%
15%
85%
15%
–
$152,353,000
62.6%
–
–
$15,389,000
70.5%
–
$152,353,000
90.3%
101.6%
0%
105.8%
106.6%
100%
90.3%
62.6%
–
101.6%
–
$152,353,000
62.6%
–
–
$172,896,000
60.0%
–
–
$14,390,000
67.0%
–
0%
90.3%
101.6%
0%
92.3%
102.5%
0%
59.1%
108.8%
–
–
–
–
–
–
$213,505
$213,505
–
–
–
–
–
–
–
–
–
–
–
–
–
–
60%
$119,324
$119,324
(1) The Board has determined that in FY23, ESG will be used as a modifier, where up to 15% of STI will be at risk for non-achievement of ESG related activities. In FY23, the
Board did not use this modifier as the 100% hurdle relating to EBITDA was not achieved, therefore, no STI was payable.
(2) The Board has determined that a discretionary bonus of 100% of STI opportunity will be paid.
(3) The Board has determined that a discretionary bonus of 60% of STI opportunity will be paid.
For the purposes of the STI awarded in FY23, pre AASB 16 underlying EBITDA was adjusted for non-trading items relating to:
acquisition, integration and simplification of company structure costs relating to Europe, Taco Bell impairments and provision for
store closure costs and capital costs incurred on digital menu boards totalling $7.9 million, to calculate the STI performance
outcomes.
Name
Role(s)
KPI summary
Drew O'Malley (1)
Managing
Director & CEO
EBITDA
GES
ESG (Board discretion) (4)
Hans Miete
CEO - CF Europe
EBITDA
GES
Nigel Williams
Group CFO
EBITDA
Dawn Linaker
CPO
GES
ESG (Board discretion) (4)
EBITDA
GES
ESG (Board discretion) (4)
Helen Moore (2)
COO – KFC Aust
EBITDA
David Timm (3)
CMO
GES
ESG (Board discretion) (4)
EBITDA (5)
GES (5)
FY22 Company level KPI Summary
Award outcomes
FY22 paid FY23
Average
weighting
Average
GES/ ESG
target
EBITDA
target
% of target
achieved
Awarded
Total STI award
(EBITDA, GES & ESG)
70%
15%
15%
80%
20%
70%
15%
15%
70%
15%
15%
70%
15%
15%
80%
20%
–
$142,917,000
66.1%
0%
–
–
–
$17,083,000
70.5%
–
–
$142,917,000
66.1%
0%
–
–
–
$142,917,000
66.1%
0%
–
–
–
$163,961,000
–
–
$7,955,000
65.5%
0%
–
67.0%
110.8%
106.9%
50%
150.0%
150.0%
110.8%
106.9%
50%
110.8%
106.9%
50%
111.8%
100.2%
50%
150%
$333,053
$68,880
$32,206
$248,695
$62,174
$231,223
$47,820
$22,359
$176,075
$36,414
$17,027
$165,417
$31,767
$15,860
$61,180
$10,197
$434,139
$310,869
$301,402
$229,516
$213,044
$71,377
–
150.0%
(1) Appointed as Managing Director & CEO effective 29 June 2021.
(2) Appointed as Chief Operating Officer – KFC Australia effective 25 June 2021.
(3) Appointed as Chief Marketing Officer effective 1 January 2022.
(4) The Board exercised a downward discretion to modify the percentage eligible for payment of a STI for FY22 associated with the ESG target to 50% of possible award.
(5) Award paid relates to the achievement of targets for KFC Netherlands only. Targets related to Taco Bell were not met.
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Page 1199 of 97
19 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
For the purposes of the STI awarded in FY22, pre AASB 16 underlying EBITDA was adjusted for non-trading items relating to: the
gain on sale of land, FX movements on dividend received, fair value gain on debt modification, Netherlands acquisition costs
and KFC Europe provisions for restaurant closures, totalling $3.4 million, to calculate the STI performance outcomes.
LONG TERM INCENTIVES
During the 2021 financial year, grants under the long term incentive plan were made on 16 October 2020 with a performance
period of FY21, FY22 and FY23 (FY21 Grant). The performance period for the FY21 Grant commenced on 4 May 2020 and ended
on 30 April 2023 (Vesting Rights). Based upon the EPS growth achieved over the three year performance period (FY21 – FY23),
no vesting was achieved for the FY21 Grants of performance rights with a performance period commencing 4 May 2022 and
ending on 30 April 2023.
In relation to the completion of the reporting period, previous grants of equity made under the LTI plan during FY22 on
14 September 2021 with a performance period of FY22, FY23 and FY24 (FY22 Grant), these will be eligible for vesting during FY25
after the completion of FY24.
Name
Role(s)
Tranche Weighting
Drew O’Malley
Managing Director & CEO
EPSG
Nigel Williams
Group CFO
Dawn Linaker
CPO
EPSG
EPSG
100%
100%
100%
Number of
eligible to vest in
FY24 for FY23
completion
% of max/
stretch/
grant vested
82,274
30,981
23,591
0%
0%
0%
Number
vested
Grant date
VWAP
–
–
–
$9.1645
$9.1645
$9.1645
$ Value of LTI
that vested
(as per grant
date VWAP)
–
–
–
The tables below set out the annualised compound EPS growth and Relative TSR hurdles applicable to the FY22 Grants:
Performance level
Stretch/Maximum
Between Target and Stretch
Target
Below Threshold and Target
Threshold
Below Threshold
Annualised EPS growth (CAGR)
% of max/ stretch/grant vesting
16.5%
>11%, <16.5%
11%
>5.5%, <11%
5.5%
<5.5%
100%
Pro-rata
50%
Pro-rata
25%
0%
Relative TSR of Collins Foods Limited
Proportion of performance rights to vest
At or above the 75th percentile
100%
Between the 50th percentile and 75th percentile
3% for each 1% > 50%, < 75%
At the 50th percentile
Below the 50th percentile
25%
0%
OTHER PERFORMANCE RIGHTS INFORMATION
The table below outlines the expiry dates of performance rights issued. Performance rights, the vesting of which are subject to
EPS growth over defined reporting periods ending in 2020 expire in July 2023. Additionally, performance rights, the vesting of
which are subject to EPS growth and Relative TSR hurdles over reporting periods ending in 2022 and 2023 expire in July 2024 and
2025.
Reporting period ended
30 April 2023
1 May 2022
2 May 2021
Expiry date
25 July 2025
24 July 2024
27 July 2023
Exercise price
Nil
Nil
Nil
There was one tranche of performance rights issued during the reporting period ended 30 April 2023. It should be noted that the
fair value used for accounting purposes is not used to determine LTI allocations which adopt a volume weighted average price
of the Company’s shares as described in the LTI summary above. The fair value at grant date for the EPS performance condition
grants was determined using a discounted cash flow model incorporating the assumptions below:
Assumption
Tranche
Fair value
Share price at Grant Date
Term (years)
Dividend Yield
Risk free interest rate
Grant date
21 September 2022
15
$8.74
$9.34
3
2.31%
3.33%
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Page 2200 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 20
REMUNERATION REPORT (CONTINUED)
Directors’ report
Remuneration rEport
The fair value at grant date for the TSR performance condition grants was determined using a Monte-Carlo simulation model
incorporating the assumptions below:
Assumption
Tranche
Fair value
Expiry date
Share price at Grant date
Expected dividend yield
Risk free interest rate
Grant date
21 September 2022
15
$5.39
25 July 2025
$9.34
2.31%
3.33%
The following outlines the vesting scales that are applicable to the performance rights issued to executives during the current
reported period and as part of remuneration for FY23:
Performance Level
Stretch/Maximum
Between Target and Stretch
Target
Between Threshold and Target
Threshold
Below Threshold
Annualised EPS growth (CAGR)
% of max/ stretch/grant vesting
16.5%
>11%, <16.5%
11%
>5.5%, <11%
5.5%
<5.5%
100%
Pro-rata
50%
Pro-rata
25%
0%
Relative TSR of Collins Foods Limited
Proportion of performance rights to vest
At or above the 75th percentile
100%
Between the 50th percentile and 75th percentile
3% for each 1% > 50%, < 75%
At the 50th percentile
Below the 50th percentile
25%
0%
There were two tranches of performance rights issued during the reporting period ended 1 May 2022. The fair value at grant
date for the EPS performance condition grants was determined using a discounted cash flow model incorporating the
assumptions below:
Assumption
Tranche
Fair value
Share price at Grant date
Term (years)
Dividend yield
Risk free interest rate
14 September 2021
1 January 2022
Grant date
14
$11.76
$12.45
3
1.85%
0.16%
14A
$12.69
$13.37
2.33
1.72%
0.75%
The fair value at grant date for the TSR performance condition grants was determined using a Monte-Carlo simulation model
incorporating the assumptions below:
Assumption
Tranche
Fair value
Expiry date
Share price at Grant date
Expected dividend yield
Risk free interest rate
Grant date
14 September 2021
1 January 2022
14
$7.54
24 July 2024
$12.45
1.91%
0.11%
14A
$8.62
24 July 2024
$13.37
1.91%
0.78%
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Page 2211 of 97
21 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Employment terms for KMP Executives
SERVICE AGREEMENTS
Directors’ report
Remuneration rEport
A summary of contract terms in relation to KMP Executives is presented below:
(1) Period of Notice
Name
Position Held at Close of FY22
Duration of Contract
From Company
From KMP
(2) Termination Payments
Drew O'Malley
Managing Director & CEO
Open ended
12 months
12 months
Up to 12 months
Hans Miete
CEO - CF Europe
Nigel Williams
Group CFO
Dawn Linaker
CPO
Helen Moore
COO – KFC Australia
David Timm
CMO
Open ended
Open ended
Open ended
Open ended
Open ended
6 months
6 months
6 months
6 months
3 months
3 months
6 months
6 months
6 months
3 months
Up to 12 months
Up to 12 months
Up to 12 months
Up to 12 months
Up to 12 months
(1) Provision is also made for the Group to be able to terminate these agreements on three months’ notice in certain circumstances of serious ill health or incapacity of
the KMP Executive.
(2) Under the Corporations Act, the Termination Benefit Limit is 12 months average Salary (last three years) unless shareholder approval is obtained.
The treatment of incentives in the case of termination is addressed in separate sections of this report that give details of
incentive design.
All KMP Executives have a restraint of trade period of 12 months. On appointment to the Board, all Non-executive Directors
enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board
policies and terms, including compensation relevant to the office of the director. Non-executive Directors are not eligible to
receive termination payments under the terms of the appointments.
VESTING RIGHTS FOR THE OUTGOING GROUP CFO AND OTHER PAYMENTS
Performance rights
On 24 March 2023, a change to the Group CFO was announced by the Company. In consideration of the outgoing Group
CFO, Nigel Williams remaining with the Company until 14 July 2023 to support the Company with the release of its full year results
and to facilitate a transition of his responsibilities, the Board considers him to be a ‘good leaver’. Accordingly, the Board has
determined that Nigel Williams’ participation in the LTIP will continue after 14 July 2023 on a pro rata basis for unvested
performance rights he was previously granted. Those performance rights are:
• 30,981 performance rights granted in FY21 for the performance period of FY21, FY22 and FY23. The threshold performance
level for these rights was not achieved over the performance period and the rights have expired;
• 41,102 performance rights granted in FY22 for the performance period of FY22, FY23 and FY24. These rights are eligible for
vesting in FY25 and Nigel will retain 66.66%, or 27,398 performance rights (vesting above);
• 50,982 performance rights granted in FY23 for the performance period of FY23, FY24 and FY25. These rights are eligible for
vesting in FY26 and Nigel will retain 33.33%, or 16,992 performance rights.
There is no acceleration of the rights granted in FY21 as the performance was not achieved. For the rights granted in FY22 and
FY23, those retained rights have been accelerated and expensed in the current year which is then offset by the reversal of
previously recognised forfeited rights.
That is, in line with the position for all other holders of the above performance rights, vesting would not occur until the
performance period had been completed, and only if vesting rights have been triggered. The Board also considered that in line
with all other performance rights holders, a voluntary lock would not be applied to any shares issued if any performance rights
were to vest in the future.
Other payments
As announced on 24 March 2023, the Group CFO, Nigel Williams, will be stepping down from his role.
The Board has agreed that the following payments will also be paid to the Group CFO:
Name
Role
Nigel Williams
Group CFO
Year
2023
(1) Total disclosed includes amounts disclosed in the Statutory KMP executive remuneration table of $175,381.
(2)
Includes other benefits: health insurance payments and outplacement consultancy costs.
Termination benefits
(1)(2) $526,143
The above amounts have been accrued for in the current year based on the proportion of the remaining service provided.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 22
Directors’ report
Remuneration rEport
REMUNERATION REPORT (CONTINUED)
Non-executive Director fee rates and fee limit
NON-EXECTIVE DIRECTOR REMUNERATION
The remuneration for Non-executive Directors is set taking into consideration factors including:
•
the level of fees paid to Board members of other publicly listed Australian companies of similar size;
• operational and regulatory complexity; and
•
the accountabilities and workload requirements of each Board member.
Non-executive Directors’ remuneration comprises the following components:
• board and committee fees; and
•
superannuation (compulsory contributions).
Board fees are structured by having regard to the accountabilities of each role fulfilled by a Director within the Board. The
Company’s constitution allows for additional payments to be made to Directors where extra or special services are provided.
Non-executive Director fees are managed within the current annual fees limit of $1,200,000 which was approved by
shareholders at the 2019 Annual General Meeting.
The following table outlines the Non-executive Director fee rates that were applicable during the reported period:
Function
Main Board
Role
Fee including super from 2 May 2022
Chair (inclusive of committee memberships)
Member
Audit and Risk Committee
Committee Chair
Remuneration and Nomination Committee
Committee Chair
Committee Members
Committee Members
$320,000
$127,400
$30,000
$14,500
$30,000
$12,500
Remuneration received by Non-executive Directors in FY23 and FY22 is disclosed below:
Name
Role
Robert Kaye, SC
Independent, Non-executive Chair
Independent, Non-executive Chair
Nicki Anderson (1)
Independent, Non-executive Director
Mark Hawthorne (2)
Independent, Non-executive Director
Independent, Non-executive Director
Independent, Non-executive Director
Christine Holman (3)
Independent, Non-executive Director
Independent, Non-executive Director
Newman Manion (4)
Non-executive Director
Non-executive Director
Bronwyn Morris AM (5)
Independent, Non-executive Director
Independent, Non-executive Director
Kevin Perkins
Non-executive Director
Non-executive Director
Russell Tate
Independent, Non-executive Director
Independent, Non-executive Director
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Board and
Committee Fees
Super-
annuation
Other
benefits
Termination
benefits
Total
$294,973
$296,720
$40,844
–
$139,770
$49,744
$150,435
$140,462
–
$45,987
$56,870
$167,632
$139,770
$140,462
$171,900
$171,900
$25,027
$23,280
$4,289
–
$14,630
$4,974
$15,688
$13,938
–
$4,490
$2,884
$2,268
$14,630
$13,938
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$320,000
$320,000
$45,133
–
$154,400
$54,718
$166,123
$154,400
–
$50,477
$59,754
$169,900
$154,400
$154,400
$171,900
$171,900
(1) Appointed as Independent Non-executive Director effective 13 January 2023.
(2) Appointed as Independent Non-executive Director effective 23 December 2021.
(3) Transitioned to Chair of the Audit and Risk Committee effective 12 July 2022.
(4) Retired as Non-executive Director effective 27 August 2021.
(5) Retired as Independent Non-executive Director effective 2 September 2022.
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Page 2233 of 97
23 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
REMUNERATION REPORT (CONTINUED)
Changes in KMP held equity
Directors’ report
Remuneration rEport
The following table outlines the changes in the amount of equity held by KMP Executives over the reporting period:
Name
Security
Number held at
open 2023
Granted as
compensation
Performance
Rights forfeited
Drew O'Malley
Shares
Performance Rights
Hans Miete
Shares
Performance Rights
Nigel Williams
Shares
Performance Rights
Dawn Linaker
Shares
Performance Rights
Helen Moore
Shares
Performance Rights
David Timm
Shares
Performance Rights
40,000
186,911
–
28,808
39,401
102,715
28,459
76,698
416
27,069
–
8,908
TOTAL
539,385
–
95,810
–
34,097
–
50,982
–
38,822
–
42,325
–
32,508
294,544
–
(16,266)
–
–
–
(16,266)
–
(11,581)
–
–
–
–
(44,113)
Received on
exercise of
Performance
Rights
14,366
(14,366)
–
–
14,366
(14,366)
10,227
(10,227)
–
–
–
–
–
Acquisition/
(Disposal)
Number held at
close 2023
19,782
–
11,000
–
4,123
–
24,543
–
–
–
–
–
59,448
74,148
252,089
11,000
62,905
57,890
123,065
63,229
93,712
416
69,394
–
41,416
849,264
The following table outlines the changes in the amount of equity held directly or indirectly by Non-executive Directors over the
reporting period:
Name
Security
Number held at
open 2023
Additions
Disposals
Other
Number held at
close 2023
Robert Kaye, SC
Nicki Anderson (1)
Mark Hawthorne
Christine Holman
Shares
Shares
Shares
Shares
Bronwyn Morris AM (2)
Shares
Kevin Perkins
Russell Tate
Shares
Shares
TOTAL
55,813
–
3,000
17,000
19,456
7,221,484
21,820
7,338,573
12,090
–
15,000
4,598
289
20,000
–
51,977
–
–
–
–
–
–
–
–
–
–
–
–
(19,745)
–
–
(19,745)
67,903
–
18,000
21,598
–
7,241,484
21,820
7,370,805
(1) Appointed as Independent Non-executive Director effective 13 January 2023.
(2) Retired as Independent Non-executive Director effective 2 September 2022. The number disclosed under Other represents number of shares held at retirement date.
The maximum value of performance rights yet to vest has been determined as the amount of the grant date fair value of the performance rights that is yet to be expensed:
2023 Equity Grants
Name
Role(s)
FY in which Rights may vest
Maximum value yet to vest ($)
Drew O'Malley
Managing Director & CEO
Hans Miete (1)
CEO - CF Europe
Nigel Williams
Group CFO
Dawn Linaker
CPO
Helen Moore (2)
COO – KFC Australia
David Timms (3)
CMO
(1) Appointed as CFO – Europe effective 5 October 2020.
(2) Appointed as Chief Operating Officer – KFC Australia effective 25 June 2021.
(3) Appointed as Chief Marketing Officer effective 1 January 2022.
2024
2025
2026
2024
2025
2026
2024
2025
2026
2024
2025
2026
2024
2025
2026
2024
2025
2026
–
93,001
277,523
–
36,204
98,766
–
51,653
147,675
–
39,333
112,452
–
34,017
122,598
–
16,845
94,162
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Page 2244 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 24
REMUNERATION REPORT (CONTINUED)
Group Securities Trading Policy
Directors’ report
Remuneration rEport
The Group Securities Trading Policy is available on the Company’s website. It contains the standard references to insider trading
restrictions that are a legal requirement under the Corporations Act, as well as conditions associated with good corporate
governance. The Group Securities Trading Policy follows the recommendations set out in ASX Guidance Note 27, ‘Trading
Policies’. The policy specifies ‘trading windows’ during which Directors and restricted employees of the Company may trade in
the securities of the Company. It requires Directors and restricted employees to obtain prior written clearance for any trading in
the Company’s securities and prohibits trading at all other times unless an exception is granted following an assessment of the
circumstances (for example financial hardship). Trading windows remain open for 30 days. The first day of the trading window is
the trading day after each of the following events:
• announcement to ASX of the Company’s full or half-year results;
• Annual General Meeting; or
•
release of a disclosure document offering equity securities in the Company.
The Board may suspend all dealings in the Company’s securities at any time, should it be appropriate.
Securities Holding Policy
The Board currently sees a Securities Holding Policy as unnecessary since executives receive a significant component of
remuneration in the form of equity. All of the Directors hold equity in the Company voluntarily. The Company’s constitution states
that Directors are not required to be a shareholder in order to be appointed as a director. The Board continues to encourage
executives to hold vested LTIs post vesting, to support ongoing alignment.
Remuneration Consultant Engagement policy
The Company has adopted a Remuneration Consultant (RC) Engagement Policy which is intended to manage the interactions
between the Company and RCs. This is to support the independence of the RNC and provide clarity regarding the extent of
any interactions between management and the RC. This policy enables the Board to state with confidence whether the advice
received has been independent, and why that view is held. The Policy states that RCs are to be approved and engaged by the
Board before any advice is received, and that such advice may only be provided to an independent Non-executive Director.
Any interactions between management and the RC must be approved and overseen by the RNC.
Other remuneration related matters
There were no loans to Directors or other KMP at any time during the reporting period, and no relevant material transactions
involving KMP other than compensation and transactions concerning shares and performance rights as discussed in this report.
Most recent AGM – Remuneration Report comments and voting
At the most recent AGM in 2022: 99.12% of votes cast at the meeting in favour of the adoption of the Remuneration Report.
External remuneration consultant advice
From time to time, the Board engages the services of external remuneration consultants. During the reporting period, the Board
did not engage an external remuneration consultant to provide KMP remuneration recommendations and advice.
To ensure that KMP remuneration recommendations are free from undue influence from the KMP to whom they relate, the
Company has established policies and procedures governing engagements with external remuneration consultants. The key
aspects include:
• as legally required, KMP remuneration recommendations may only be received from consultants who have been approved
by the Board. Before such approval is given and before each engagement the Board ensures that the consultant is
independent of KMP.
• as required by law, KMP remuneration recommendations are only received by non-executive directors, mainly, the Chair of
the RNC.
•
the policy seeks to ensure that the Board controls any engagement by management of Board approved remuneration
consultants to provide advice other than KMP remuneration recommendations and any interactions between management
and external remuneration consultants when undertaking work leading to KMP remuneration recommendations.
The Board is satisfied that the above policies ensure any KMP remuneration recommendations are received free from undue
influence from KMP to whom the recommendations related. The Board remains closely involved in all dealings with the external
remuneration consultants and each KMP remuneration recommendation received during a reporting period would be
accompanied by a legal declaration from the consultant to the effect that their advice was provided free from undue
influence from the KMP to whom the recommendations related.
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25 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Directors’ report
DIRECTORS' REPORT (CONTINUED)
Indemnification and insurance of officers
The Company’s Constitution provides that it must in the case of a person who is or has been a Director or Secretary of the
Group and may in the case of an officer of the Company, indemnify them against liabilities incurred (whilst acting as such
officers) and the legal costs of that person to the extent permitted by law. During the period, the Company has entered into a
Deed of Indemnity, Insurance and Access with each of the Company’s Directors, executives and Company Secretary.
No Director or officer of the Company has received benefits under an indemnity from the Company during or since the end of
the period.
The Company has paid a premium for insurance for officers of the Group. The cover provided by the insurance contract is
customary for this type of insurance policy. Details of the nature of the liabilities covered or the amount of the premium paid in
respect of this insurance contract are not disclosed as such disclosure is prohibited under the insurance contract.
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
During the period, the Company’s Auditor (PricewaterhouseCoopers) performed other services in addition to its audit
responsibilities. Whilst their main role is to provide audit services to the Company, the Company does employ their specialist
advice where appropriate.
The Board of Directors has considered the position and, in accordance with advice received from the Audit and Risk
Committee (ARC), is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit
services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• all non-audit services have been reviewed by the ARC to ensure they do not impact the impartiality and objectivity of the
auditor; and
• none of the services undermine the general principles relating to auditor independence, including not reviewing or auditing
the auditor’s own work, not acting in a management or a decision making capacity for the Company, not acting as
advocate for the Company, or not jointly sharing economic risk or rewards.
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Page 2266 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 26
Directors’ report
Directors’ report
DIRECTORS' REPORT (CONTINUED)
During the period the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
Auditor’s Independence Declaration
2023
Whole
dollars
$
2022
Whole
dollars
$
on page 29.
ROUNDING OF AMOUNTS
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued
by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report.
Amounts in the Directors’ Report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or
in certain cases, to the nearest dollar.
AUDITOR
accordance with a resolution of Directors.
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in
Robert Kaye SC
Chair
Brisbane
27 June 2023
AUDIT AND OTHER ASSURANCE SERVICES
AUDIT SERVICES:
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports and other audit work under the Corporations Act 2001
Audit and review of financial reports and other audit work for foreign subsidiary
Network firm of PricewaterhouseCoopers Australia:
Audit and review of financial reports and other audit work for foreign subsidiary
OTHER ASSURANCE SERVICES:
PricewaterhouseCoopers Australian firm:
Restaurant sales certificates
Agreed upon procedures for covenant calculations
ESG assurance
Network firm of PricewaterhouseCoopers Australia:
Taxation advice
Total remuneration for audit and other assurance services
TAXATION SERVICES
PricewaterhouseCoopers Australian firm:
Tax compliance services, including review of tax returns and allowance claims
Network firm of PricewaterhouseCoopers Australia:
Tax compliance services, including review of company tax returns
Total remuneration for taxation services
OTHER SERVICES
PricewaterhouseCoopers Australian firm:
Acquisition related due diligence
Total remuneration for other services
616,311
48,073
517,928
1,182,312
5,400
8,100
35,000
–
48,500
1,230,812
–
–
–
–
–
401,370
45,402
349,618
796,390
25,096
7,650
70,890
10,457
114,093
910,483
46,560
5,011
51,571
120,000
120,000
TOTAL REMUNERATION FOR SERVICES
1,230,812
1,082,054
It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments are principally tax
advice, due diligence reporting on acquisitions and capital raisings, or where PricewaterhouseCoopers is awarded assignments
on a competitive basis. It is the Company’s policy to seek competitive tenders for all major consulting projects.
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 28 of 97
27 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Directors’ report
DIRECTORS' REPORT (CONTINUED)
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out
on page 29.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued
by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report.
Amounts in the Directors’ Report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or
in certain cases, to the nearest dollar.
AUDITOR
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in
accordance with a resolution of Directors.
Robert Kaye SC
Chair
Brisbane
27 June 2023
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 28 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 28
(a)
(a)
(b)
Auditor’s Independence Declaration
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Collins Foods Limited and the entities it controlled during the period.
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
As lead auditor for the audit of Collins Foods Limited for the period 2 May 2022 to 30 April 2023,
I declare that to the best of my knowledge and belief, there have been:
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED INCOME STATEMENT
For the reporting period ended 30 April 2023
Auditor’s Independence Declaration
As lead auditor for the audit of Collins Foods Limited for the period 2 May 2022 to 30 April 2023,
I declare that to the best of my knowledge and belief, there have been:
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Collins Foods Limited and the entities it controlled during the period.
Share of net loss of associates and joint ventures accounted for using the equity
Profit from continuing operations before income tax
14,668
79,603
Michael Crowe
Partner
PricewaterhouseCoopers
Michael Crowe
Partner
PricewaterhouseCoopers
Brisbane
27 June 2023
Income tax expense
Profit from continuing operations
G12
(3,390)
11,278
(25,526)
54,077
Profit from discontinued operation (attributable to equity holders of the
F1
1,468
722
Net profit attributable to members of Collins Foods Limited
12,746
54,799
(1) Comparative figures have been restated to present the impacts of the current period discontinued operations (as outlined in Note F1)
Company)
Brisbane
27 June 2023
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Revenue
Cost of sales
Gross profit
Selling, marketing and royalty expenses
Occupancy expenses
Restaurant related expenses
Administrative expenses
Other expenses
Other income
Other gains/(losses) – net
income tax (EBIT)
Finance income
Finance costs
method
Profit from continuing operations before finance income, finance costs and
Notes
A3
G2
A4
A4
E1
2023
$000
1,348,614
(672,345)
676,269
(297,738)
(126,282)
(112,982)
(78,131)
(18,884)
5,878
(1,050)
1,022
(5)
(1) 2022
$000
1,181,699
(562,358)
619,341
(256,607)
(79,523)
(93,291)
(69,967)
(15,099)
1,588
3,373
–
(5)
47,080
109,815
(33,429)
(30,207)
Notes
G3
G3
G3
G3
G3
G3
Notes
2023
cents per
share
2022
cents per
share
9.62
1.25
9.57
1.25
46.34
0.62
46.13
0.62
2023
Shares
2022
Shares
117,177,086
116,696,110
117,904,019
117,223,628
Basic earnings per share from continuing operations (cents)
Basic earnings per share from discontinued operations (cents)
Diluted earnings per share from continuing operations (cents)
Diluted earnings per share from discontinued operations (cents)
Weighted average basic ordinary shares outstanding
Weighted average diluted ordinary shares outstanding
The above Consolidated Income Statement should be read in conjunction with the accompanying Notes.
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29 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Page 2299 of 97
Liability limited by a scheme approved under Professional Standards Legislation.
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Page 2299 of 97
CONSOLIDATED INCOME STATEMENT
For the reporting period ended 30 April 2023
Revenue
Cost of sales
Gross profit
Selling, marketing and royalty expenses
Occupancy expenses
Restaurant related expenses
Administrative expenses
Other expenses
Other income
Other gains/(losses) – net
Profit from continuing operations before finance income, finance costs and
income tax (EBIT)
Finance income
Finance costs
Share of net loss of associates and joint ventures accounted for using the equity
method
Notes
A3
G2
A4
A4
E1
2023
$000
1,348,614
(672,345)
676,269
(297,738)
(126,282)
(112,982)
(78,131)
(18,884)
5,878
(1,050)
(1) 2022
$000
1,181,699
(562,358)
619,341
(256,607)
(79,523)
(93,291)
(69,967)
(15,099)
1,588
3,373
47,080
109,815
1,022
–
(33,429)
(30,207)
(5)
(5)
Profit from continuing operations before income tax
14,668
79,603
Income tax expense
Profit from continuing operations
G12
(3,390)
11,278
(25,526)
54,077
Profit from discontinued operation (attributable to equity holders of the
Company)
F1
1,468
722
Net profit attributable to members of Collins Foods Limited
12,746
54,799
(1) Comparative figures have been restated to present the impacts of the current period discontinued operations (as outlined in Note F1)
Basic earnings per share from continuing operations (cents)
Basic earnings per share from discontinued operations (cents)
Diluted earnings per share from continuing operations (cents)
Diluted earnings per share from discontinued operations (cents)
Weighted average basic ordinary shares outstanding
Weighted average diluted ordinary shares outstanding
Notes
G3
G3
G3
G3
Notes
G3
G3
2023
cents per
share
2022
cents per
share
9.62
1.25
9.57
1.25
46.34
0.62
46.13
0.62
2023
Shares
2022
Shares
117,177,086
116,696,110
117,904,019
117,223,628
The above Consolidated Income Statement should be read in conjunction with the accompanying Notes.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the reporting period ended 30 April 2023
CONSOLIDATED BALANCE SHEET
As at 30 April 2023
Net profit attributable to members of Collins Foods Limited
items that may be reclassified to profit or loss
Other comprehensive income/(expense):
Exchange differences on translation of foreign operations
Exchange differences on translation of discontinued operations
Cash flow hedges
Income tax relating to components of other comprehensive income
Other comprehensive income/(expense) for the period, net of tax
Notes
G11
G11
G11
G12
2023
$000
12,746
2,172
971
1,474
(442)
4,175
2022
$000
54,799
(511)
–
5,760
(1,728)
3,521
Total comprehensive income for the reporting period
16,921
58,320
Total comprehensive income for the period is attributable to:
Owners of the parent
16,921
58,320
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
Investments accounted for using the equity method
Derivative financial instruments
C3
1,779
1,240,067
1,370,372
1,169,117
1,282,971
Liabilities directly associated with assets classified as held for sale
179,158
166,489
Notes
2023
$000
2022
$000
B1
G4
C3
F1
G5
G6
G8
G12
G9
G8
G10
F1
B3
G8
G12
G10
D3
G11
80,236
20,099
8,320
3,367
3,562
2,479
12,242
130,305
224,520
492,292
465,818
55,658
–
–
116,515
44,639
2,013
13,959
2,032
291,857
506,872
123
7,864
806,716
985,874
384,498
297,372
18,741
68,385
384,498
97,217
4,200
7,930
662
3,845
–
–
113,854
216,099
475,292
432,468
39,825
2,397
2,784
252
116,473
37,766
5,514
6,736
–
270,994
439,623
5,148
7,190
722,955
889,444
393,527
291,394
14,871
87,262
393,527
ASSETS
Current assets:
Receivables
Inventories
Cash and cash equivalents
Derivative financial instruments
Assets classified as held for sale
Property, plant and equipment
Current tax assets
Other assets
Total current assets
Non-current assets:
Intangible assets
Right-of-use assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities:
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities:
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
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31 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
CONSOLIDATED BALANCE SHEET
As at 30 April 2023
ASSETS
Current assets:
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Current tax assets
Other assets
Assets classified as held for sale
Total current assets
Non-current assets:
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax assets
Investments accounted for using the equity method
Derivative financial instruments
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities:
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Liabilities directly associated with assets classified as held for sale
Total current liabilities
Non-current liabilities:
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Notes
2023
$000
2022
$000
B1
G4
C3
F1
G5
G6
G8
G12
C3
G9
G8
G10
F1
B3
G8
G12
G10
D3
G11
80,236
20,099
8,320
3,367
3,562
2,479
12,242
130,305
224,520
492,292
465,818
55,658
–
1,779
–
97,217
4,200
7,930
662
–
3,845
–
113,854
216,099
475,292
432,468
39,825
2,397
2,784
252
1,240,067
1,370,372
1,169,117
1,282,971
116,515
44,639
2,013
13,959
2,032
116,473
37,766
5,514
6,736
–
179,158
166,489
291,857
506,872
123
7,864
806,716
985,874
384,498
297,372
18,741
68,385
384,498
270,994
439,623
5,148
7,190
722,955
889,444
393,527
291,394
14,871
87,262
393,527
The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes.
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Page 3322 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 32
CONSOLIDATED STATEMENT OF CASH FLOWS
For the reporting period ended 30 April 2023
Cash flows from operating activities
Receipts from customers (inclusive of GST and VAT)
Payments to suppliers and employees (inclusive of GST and VAT)
Goods and services taxes (GST) and Value added taxes (VAT) paid
Interest received
Interest and other borrowing costs paid
Interest paid on leases
Income tax paid
Net operating cash flows
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash acquired
Deposit for acquisition of subsidiary
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Net investing cash flows
Cash flows from financing activities
Refinance fees paid
Proceeds from borrowings - bank loan facilities
Repayment of borrowings and other obligations
Payments for lease principal
Dividends paid
Net financing cash flows
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the reporting period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of reporting period
Notes
(1) 2023
$000
(1) 2022
$000
1,474,617
1,313,864
(1,201,214)
(1,042,196)
(65,177)
(59,236)
B1
B1
B1
A2
B1
B1
B1
B1
B1
B1
910
(7,272)
(25,376)
(30,272)
146,216
(4,601)
(13,316)
(65,766)
–
(9,860)
(93,543)
–
28,296
(25,000)
(39,863)
(29,377)
(65,944)
(13,271)
97,217
(3,710)
80,236
–
(6,647)
(22,679)
(26,772)
156,334
(28,339)
–
(67,844)
4,246
(5,372)
(97,309)
(1,472)
32,581
(28,000)
(36,465)
(28,591)
(61,947)
(2,922)
95,717
4,422
97,217
(1) Cash flows from the discontinued Sizzler Asia business are included above – refer to Note F for breakdown of separate cash flows relating to the discontinued
operation.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the reporting period ended 30 April 2023
Notes Contributed
Reserves
2023
Balance as at 1 May 2022
Profit for the reporting period
Other comprehensive income
Total comprehensive income for the reporting period
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Share based payments
Issue of shares as consideration for acquisition
Dividends provided for or paid
Performance rights vested
End of the reporting period
2022
Balance as at 2 May 2021
Profit for the reporting period
Other comprehensive income
Total comprehensive income for the reporting period
Transactions with owners in their capacity as owners:
Share based payments
Dividends provided for or paid
Performance rights vested
End of the reporting period
equity
$000
291,394
2,246
3,000
732
297,372
$000
290,788
–
–
–
–
–
–
–
–
–
–
606
291,394
Retained
earnings
$000
87,262
12,746
12,746
–
–
–
–
–
–
–
–
$000
61,054
54,799
54,799
$000
14,871
–
4,175
4,175
427
–
–
–
(732)
18,741
$000
10,756
–
3,521
3,521
1,200
(606)
14,871
Total
equity
$000
393,527
12,746
4,175
16,921
2,246
427
3,000
–
$000
362,598
54,799
3,521
58,320
1,200
–
–
(28,591)
(28,591)
87,262
393,527
(31,623)
(31,623)
68,385
384,498
D3
G11
A2
B4
G11
G11
B4
G11
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
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33 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the reporting period ended 30 April 2023
Notes Contributed
equity
Reserves
Retained
earnings
2023
Balance as at 1 May 2022
Profit for the reporting period
Other comprehensive income
Total comprehensive income for the reporting period
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Share based payments
Issue of shares as consideration for acquisition
Dividends provided for or paid
Performance rights vested
End of the reporting period
2022
Balance as at 2 May 2021
Profit for the reporting period
Other comprehensive income
Total comprehensive income for the reporting period
Transactions with owners in their capacity as owners:
Share based payments
Dividends provided for or paid
Performance rights vested
End of the reporting period
D3
G11
A2
B4
G11
G11
B4
G11
$000
291,394
–
–
–
2,246
–
3,000
–
732
297,372
$000
290,788
–
–
–
–
–
Total
equity
$000
393,527
12,746
4,175
16,921
$000
87,262
12,746
–
12,746
–
–
–
2,246
427
3,000
(31,623)
(31,623)
–
–
68,385
384,498
$000
61,054
54,799
–
54,799
$000
362,598
54,799
3,521
58,320
$000
14,871
–
4,175
4,175
–
427
–
–
(732)
18,741
$000
10,756
–
3,521
3,521
1,200
–
1,200
–
(28,591)
(28,591)
606
291,394
(606)
14,871
–
–
87,262
393,527
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A: FINANCIAL OVERVIEW
This section provides information that is most relevant to explaining the Group’s performance during the reporting period,
and where relevant, the accounting policies that have been applied and significant estimates and judgements made.
A1: Segment information continued
LOCATION OF REVENUE AND NON-CURRENT ASSETS
A1: Segment information
A2: Business combinations
A3: Revenue
A4: Material profit or loss items from continuing operations
A1: Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing the performance of the
operating segments, has been identified as the Managing Director & CEO.
DESCRIPTION OF SEGMENTS
Management has determined the operating segments based on the reports reviewed by the Managing Director & CEO that
are used to make strategic decisions. Three reportable segments have been identified: KFC Restaurants Australia, KFC
Restaurants Europe and Taco Bell Restaurants, all competing in the quick service restaurant market.
Other includes Shared Services which performs a number of administrative and management functions for the Group’s
restaurants, as well as the operating segment of Sizzler Asia Restaurants. This segment is not separately reportable due to its
relative size in both the current and prior reporting periods.
SEGMENT INFORMATION PROVIDED TO THE MANAGING DIRECTOR & CEO
The following is an analysis of the revenue and results by reportable operating segment for the periods under review:
Underlying EBITDA
2023
Total segment revenue
Underlying EBITDA (2)
Depreciation and amortisation (3)
Impairment (4)
Finance costs - net
Income tax expense
2022
Total segment revenue
Underlying EBITDA (2)
Depreciation and amortisation (3)
Impairment (4)
Finance costs - net
Income tax expense
KFC
Australia
restaurants
KFC
Europe
restaurants
$000
$000
1,051,272
248,676
201,623
65,567
–
19,944
–
$000
955,508
206,867
63,510
–
18,242
–
32,819
23,650
4,592
5,481
–
$000
190,439
27,577
19,998
–
4,110
–
Taco Bell
restaurants
(1) Other
Total
$000
48,666
(1,546)
5,098
49,054
1,502
–
$000
35,752
(421)
5,208
3,163
925
–
$000
4,113
$000
1,352,727
(24,858)
208,038
3,839
–
5,480
3,899
$000
2,822
98,154
53,646
32,407
3,899
$000
1,184,521
(24,807)
209,216
4,379
–
6,930
25,890
93,095
3,163
30,207
25,890
(1) Other includes Shared Services and Sizzler Asia restaurants. The Sizzler Asia business has been classified as held for sale at 30 April 2023, however has been included in
the Segment information as the operating results were reviewed by the Managing Director & CEO for the financial period to 30 April 2023 (Note F).
(2) Refer below for a description and reconciliation of Underlying EBITDA.
(3) Refer below for a reconciliation of total depreciation and amortisation, and impairment of the Group. Refer to Note G7 for information on impairment per asset class,
per segment for the reporting period.
(4) Refer to Note G7 for information on impairment per asset class, per segment for the reporting period. The prior year comparatives have been restated to separate
impairment from depreciation and amortisation.
Notes to the Consolidated Financial Statements
Non-current assets (property, plant and equipment, intangibles, and
900,836
right-of-use assets)
Non-current assets (property, plant and equipment, intangibles, and
right-of-use assets)
(1)
The Sizzler Asia business has been classified as held for sale at 30 April 2023, however has been included in the Segment information as the operating results were
reviewed by the Managing Director & CEO for the financial period to 30 April 2023. Refer to Note F. All non-current assets are classified as current assets at 30 April
Australia
Europe
(1) Asia
$000
$000
$000
Total
$000
1,099,938
248,676
281,794
4,113
1,352,727
–
1,182,630
$000
$000
$000
$000
991,260
878,834
190,439
234,960
2,822
1,184,521
10,065
1,123,859
2023
Revenue
2022
Revenue
2023.
OTHER SEGMENT INFORMATION
Segment revenue
There are no sales between segments. The revenue from external parties reported to the Board is measured in a manner
consistent with that in the Consolidated Income Statement.
Revenue from external customers is derived from the sale of food in KFC and Taco Bell restaurants, franchise fees and royalties
from Sizzler Asia restaurants and service fees relating to the CFA in Europe.
The Board assesses the performance of the operating segments based on a measure of Underlying EBITDA. This measurement
basis excludes the effects of costs associated with acquisitions (refer to Note A2). It also excludes impairment of property, plant,
equipment, franchise rights, brand assets, goodwill and leases to the extent they are isolated non-recurring events plus any
other non-recurring items. Net finance costs (including the impact of derivative financial instruments) are not allocated to
segments as this type of activity is driven by the central treasury function, which manages the cash position of the Group.
A reconciliation of Underlying EBITDA to profit/(loss) from operations before income tax is provided as follows:
Underlying EBITDA
Finance costs
Depreciation
Amortisation
Acquisition and operational integration costs expensed
Impairment of property, plant and equipment
Impairment of intangible assets
Impairment of right-of-use assets
Fair value gain on debt modification
Provision for store closure and onerous contracts
Gain on sale and leaseback
Other non-trading items
Profit before income tax from operations
Share of net profit of joint venture accounted for using the equity method
2023
$000
208,038
(32,407)
(3,495)
(94,062)
(4,092)
(21,534)
(1,060)
(31,052)
(5)
–
–
(2,393)
(1,293)
16,645
2022
$000
209,216
(30,207)
(2,932)
(88,531)
(4,564)
(1,523)
(31)
(1,609)
(5)
(945)
–
1,243
577
80,689
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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35 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 36 of 97
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A1: Segment information continued
LOCATION OF REVENUE AND NON-CURRENT ASSETS
2023
Revenue
Non-current assets (property, plant and equipment, intangibles, and
right-of-use assets)
2022
Revenue
Non-current assets (property, plant and equipment, intangibles, and
right-of-use assets)
Australia
Europe
(1) Asia
$000
$000
$000
Total
$000
1,099,938
900,836
248,676
281,794
4,113
1,352,727
–
1,182,630
$000
$000
$000
$000
991,260
878,834
190,439
234,960
2,822
1,184,521
10,065
1,123,859
(1)
The Sizzler Asia business has been classified as held for sale at 30 April 2023, however has been included in the Segment information as the operating results were
reviewed by the Managing Director & CEO for the financial period to 30 April 2023. Refer to Note F. All non-current assets are classified as current assets at 30 April
2023.
OTHER SEGMENT INFORMATION
Segment revenue
There are no sales between segments. The revenue from external parties reported to the Board is measured in a manner
consistent with that in the Consolidated Income Statement.
Revenue from external customers is derived from the sale of food in KFC and Taco Bell restaurants, franchise fees and royalties
from Sizzler Asia restaurants and service fees relating to the CFA in Europe.
Underlying EBITDA
The Board assesses the performance of the operating segments based on a measure of Underlying EBITDA. This measurement
basis excludes the effects of costs associated with acquisitions (refer to Note A2). It also excludes impairment of property, plant,
equipment, franchise rights, brand assets, goodwill and leases to the extent they are isolated non-recurring events plus any
other non-recurring items. Net finance costs (including the impact of derivative financial instruments) are not allocated to
segments as this type of activity is driven by the central treasury function, which manages the cash position of the Group.
A reconciliation of Underlying EBITDA to profit/(loss) from operations before income tax is provided as follows:
Underlying EBITDA
Finance costs
Acquisition and operational integration costs expensed
Depreciation
Amortisation
Impairment of property, plant and equipment
Impairment of intangible assets
Impairment of right-of-use assets
Share of net profit of joint venture accounted for using the equity method
Fair value gain on debt modification
Provision for store closure and onerous contracts
Gain on sale and leaseback
Other non-trading items
Profit before income tax from operations
2023
$000
208,038
(32,407)
(3,495)
(94,062)
(4,092)
(21,534)
(1,060)
(31,052)
(5)
–
(2,393)
–
(1,293)
16,645
2022
$000
209,216
(30,207)
(2,932)
(88,531)
(4,564)
(1,523)
(31)
(1,609)
(5)
(945)
–
1,243
577
80,689
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 36
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A2: Business combinations
CURRENT PERIOD
KFC RESTAURANTS (AUSTRALIA) – SUMMARY OF ACQUISITION (GRIFFITH)
On 3 May 2022, Collins Restaurants South Pty Ltd, a wholly owned subsidiary of Collins Foods Limited, entered into a Business Sale
Agreement to acquire the KFC Griffith restaurant from Shayden Nominees Pty Ltd as Trustee for the C&M Income Trust. The
Group paid $7.6 million for the acquisition.
The primary reason for the acquisition was to expand the Group's operations in New South Wales in the quick service restaurant
market.
Details of the purchase consideration is as follows:
Cash paid
Ordinary shares issued
Total purchase consideration
$000
4,604
3,000
7,604
statements for the year ended 1 May 2022.
ACCOUNTING POLICY
The fair value of the 284,091 ordinary shares issued as part of the considerations paid for KFC Griffith ($3.0 million) was based on
the VWAP of Collins Foods Limited (ASX Ticker: CKF) for the 10 trading days immediately prior to the date of the Agreement.
The fair values of the assets and liabilities of the business acquired as at the date of acquisition are as follows:
Cash and cash equivalents
Receivables
Inventories
Property, plant and equipment
Intangibles
Right-of-use asset
Deferred tax asset
Lease liability
Provisions
Net identifiable assets acquired
Goodwill
Net assets acquired
Fair Value
$000
3
1
27
266
9
3,138
17
(3,138)
(36)
287
7,317
7,604
The goodwill is attributable to the workforce and access to an established market with opportunities for future expansion.
Acquisition related costs
The acquisition related costs have been recognised in the Group's Consolidated Income Statement (Other expenses) and in
operating cash flows in the Consolidated Statement of Cash Flows (Payments to suppliers and employees).
Revenue is recognised when performance obligations under relevant customer contracts are completed. Performance
obligations may be completed at a point in time or over time.
In the following table revenue is disaggregated by type and by timing of revenue recognition.
No single customer amounts to 10% or more of the consolidated entity’s total external revenue.
Purchase consideration – cash flow
Cash consideration
Less: balances acquired
Outflow of cash - investing activities
As at acquisition date
$000
4,604
(3)
4,601
The fair value of assets acquired and liabilities assumed may be amended during the measurement period, however,
management did not identify any changes from the provisional amounts recognised during the reporting period to 30 April
2023.
The acquired business contributed revenues of $4.8 million and Underlying EBITDA of $0.6 million for the period the restaurant
was owned, up to 30 April 2023.
If the acquisition had occurred on 2 May 2022, the consolidated revenue from Continuing operations and consolidated
Underlying EBITDA for the reporting period ending 30 April 2023 would have been $1,349.1 million and $208.1 million respectively.
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37 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
A2: Business combinations continued
PRIOR PERIOD
On 1 June 2021, Collins Foods Netherlands Limited, a wholly owned subsidiary of Collins Foods Limited, acquired 100% of the
share capital of KFC Taupo Lelystad. Details of this business combination were disclosed in note A2 of the Group’s annual
financial statements for the year ended 1 May 2022.
On 1 July 2021, Collins Foods Netherlands Limited, a wholly owned subsidiary of Collins Foods Limited, acquired five KFC
restaurants located in the Netherlands. Details of this business combination were disclosed in note A2 of the Group’s annual
financial statements for the year ended 1 May 2022.
On 31 December 2021, Collins Foods Netherlands Management B.V., a wholly owned subsidiary of Collins Foods Limited,
entered into a Framework Agreement to acquire the business assets and assumed liabilities from KFC Europe SARL. Details of this
business combination were disclosed in note A2 of the Group’s annual financial statements for the year ended 1 May 2022.
On 1 February 2022, Collins Foods Operations B.V., a wholly owned subsidiary of Collins Foods Limited, acquired nine KFC
restaurants in the Netherlands. Details of this business combination were disclosed in note A2 of the Group’s annual financial
The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments
or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued, or liabilities incurred or
assumed at the date of exchange. Where equity instruments are issued in an acquisition, the value of the instruments is their
published market price as at the date of exchange unless other valuation methods provide a more reliable measure of fair
value. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair
value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. Transaction costs arising on
the issue of equity instruments are recognised directly in equity. Transaction costs arising from business combinations are
expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the
Consolidated Income Statement, but only after a reassessment of the identification and measurement of the net assets
acquired.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
A3: Revenue
REVENUE TYPE
2023
Sale of goods
CFA revenue
KFC
Australia
restaurants
$000
1,051,272
–
1,051,272
KFC
Europe
restaurants
$000
245,062
3,614
248,676
Taco Bell
restaurants
$000
48,666
–
(1) Total
$000
1,345,000
3,614
48,666
1,348,614
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A2: Business combinations continued
PRIOR PERIOD
On 1 June 2021, Collins Foods Netherlands Limited, a wholly owned subsidiary of Collins Foods Limited, acquired 100% of the
share capital of KFC Taupo Lelystad. Details of this business combination were disclosed in note A2 of the Group’s annual
financial statements for the year ended 1 May 2022.
On 1 July 2021, Collins Foods Netherlands Limited, a wholly owned subsidiary of Collins Foods Limited, acquired five KFC
restaurants located in the Netherlands. Details of this business combination were disclosed in note A2 of the Group’s annual
financial statements for the year ended 1 May 2022.
On 31 December 2021, Collins Foods Netherlands Management B.V., a wholly owned subsidiary of Collins Foods Limited,
entered into a Framework Agreement to acquire the business assets and assumed liabilities from KFC Europe SARL. Details of this
business combination were disclosed in note A2 of the Group’s annual financial statements for the year ended 1 May 2022.
On 1 February 2022, Collins Foods Operations B.V., a wholly owned subsidiary of Collins Foods Limited, acquired nine KFC
restaurants in the Netherlands. Details of this business combination were disclosed in note A2 of the Group’s annual financial
statements for the year ended 1 May 2022.
ACCOUNTING POLICY
The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments
or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued, or liabilities incurred or
assumed at the date of exchange. Where equity instruments are issued in an acquisition, the value of the instruments is their
published market price as at the date of exchange unless other valuation methods provide a more reliable measure of fair
value. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair
value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. Transaction costs arising on
the issue of equity instruments are recognised directly in equity. Transaction costs arising from business combinations are
expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of
acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the
Consolidated Income Statement, but only after a reassessment of the identification and measurement of the net assets
acquired.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
A3: Revenue
Revenue is recognised when performance obligations under relevant customer contracts are completed. Performance
obligations may be completed at a point in time or over time.
In the following table revenue is disaggregated by type and by timing of revenue recognition.
No single customer amounts to 10% or more of the consolidated entity’s total external revenue.
REVENUE TYPE
2023
Sale of goods
CFA revenue
KFC
Australia
restaurants
$000
1,051,272
–
1,051,272
KFC
Europe
restaurants
$000
245,062
3,614
248,676
Taco Bell
restaurants
$000
48,666
–
(1) Total
$000
1,345,000
3,614
48,666
1,348,614
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 38
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
A3: Revenue continued
Franchise agreements entitle the Group to two streams of revenue:
•
franchise fees: revenue relating to franchise fees is recognised over time. The transaction price allocated to these services is
recognised as a contract liability at the time of the commencement of the contract and is released on a straight-line basis
over the period of the contract; and
•
sales-based royalties: revenue relating to sales-based royalties is recognised as the subsequent sale occurs.
Accounting for costs to fulfil a contract
Costs that relate directly to a contract with customers, generate resources used in satisfying the contract and are expected to
be recovered are capitalised as costs to fulfil a contract. The asset is amortised at a pattern consistent with the recognition of
the associated revenue.
CFA revenue
CFA revenue entitles the Group to one stream of revenue:
• Management service fee revenue: revenue relating to the satisfaction of a single performance obligation: managing and
growing the KFC brand in the Netherlands. The revenue is recognised over time as the respective services are delivered.
In satisfying the above performance obligation, the following funds are received by the Group in their capacity as agent:
• Marketing fees: funds received for advertising contributions received for the marketing of the business in the Netherlands.
• Supply chain fees: funds received for the management of the Netherlands Supply Chain services.
• Digital and eCommerce fees: for the management of the Digital and eCommerce services.
•
Learning zone fee: received for the provision of Learning and Development services.
All CFA revenue arises in Europe.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to
the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the
transaction prices for the time value of money.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A3: Revenue continued
KFC
Australia
restaurants
KFC
Europe
restaurants
Taco Bell
restaurants
2022
Sale of goods
CFA revenue
$000
955,508
–
955,508
$000
186,867
3,572
190,439
(1) The Sizzler Asia business has been classified as held for sale at 30 April 2023. All revenue for the Sizzler Asia business are included in Note F1.
TIMING OF REVENUE RECOGNITION
KFC
Europe
restaurants
Taco Bell
restaurants
2023
At a point in time
Over time
2022
At a point in time
Over time
KFC
Australia
restaurants
$000
1,051,272
–
1,051,272
$000
955,508
–
955,508
$000
245,062
3,614
248,676
$000
187,952
2,487
190,439
$000
35,752
–
$000
48,666
–
48,666
$000
35,752
–
(1) Total
$000
1,178,127
3,572
(1) Total
$000
1,345,000
3,614
1,348,614
$000
1,179,212
2,487
35,752
1,181,699
35,752
1,181,699
(1)
The Sizzler Asia business has been classified as held for sale at 30 April 2023. All revenue for the Sizzler Asia business are included in Note F1.
ACCOUNTING POLICY
Sale of goods
The Group operates a number of quick service and casual dining restaurants. The revenue from the sale of food and beverages
from these restaurants is recognised when the Group sells a product to the customer. Payment of the transaction price is due
immediately when the customer purchases the food and beverages.
Sale of goods – customer loyalty program
The Taco Bell brand within the Group operates a loyalty program where retail customers accumulate points for purchases
made, which entitle them to discounts on future purchases. Revenue from the award points is recognised when the points are
redeemed or when they expire 12 months after the initial sale.
A contract liability is recognised until the points are redeemed or expire.
Critical judgements in allocating the transaction price
The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the
promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the
product and the points on a relative stand-alone selling price basis.
Management estimates the stand-alone selling price per point on the basis of the discount granted when the points are
redeemed and on the likelihood of redemption, which is based on industry knowledge given there is insufficient historical
experience to draw upon at this stage of the brand in Australia.
Franchise revenue
The Sizzler segment of the Group is the franchisor of the Sizzler brand in Asia. Franchise agreements are entered into where the
Group allocates the right to external parties to use the Sizzler name and associated intellectual property. These contracts run for
a 20 year period, with a right to renewal for an additional 20 years.
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39 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A3: Revenue continued
Franchise agreements entitle the Group to two streams of revenue:
•
franchise fees: revenue relating to franchise fees is recognised over time. The transaction price allocated to these services is
recognised as a contract liability at the time of the commencement of the contract and is released on a straight-line basis
over the period of the contract; and
•
sales-based royalties: revenue relating to sales-based royalties is recognised as the subsequent sale occurs.
Accounting for costs to fulfil a contract
Costs that relate directly to a contract with customers, generate resources used in satisfying the contract and are expected to
be recovered are capitalised as costs to fulfil a contract. The asset is amortised at a pattern consistent with the recognition of
the associated revenue.
CFA revenue
CFA revenue entitles the Group to one stream of revenue:
• Management service fee revenue: revenue relating to the satisfaction of a single performance obligation: managing and
growing the KFC brand in the Netherlands. The revenue is recognised over time as the respective services are delivered.
In satisfying the above performance obligation, the following funds are received by the Group in their capacity as agent:
• Marketing fees: funds received for advertising contributions received for the marketing of the business in the Netherlands.
• Supply chain fees: funds received for the management of the Netherlands Supply Chain services.
• Digital and eCommerce fees: for the management of the Digital and eCommerce services.
•
Learning zone fee: received for the provision of Learning and Development services.
All CFA revenue arises in Europe.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to
the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the
transaction prices for the time value of money.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 40
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A4: Material profit or loss items from continuing operations
The Group has identified a number of items which are material due to the significance of their nature and/or amount. These are
listed separately here to provide a better understanding of the financial performance of the Group.
B: CASH MANAGEMENT
Collins Foods Limited has a focus on maintaining a strong balance sheet with the strategy incorporating the Group’s
expenditure, growth and acquisition requirements, and the desire to return dividends to shareholders.
Notes
2023
$000
2022
$000
B1: Cash and cash equivalents
Depreciation, amortisation and impairment
Depreciation:
Property, plant and equipment
Right-of-use assets
Total depreciation
Amortisation
Intangible assets
Total amortisation
Impairment
Property, plant and equipment
Intangible assets
Right-of-use assets
Total impairment
G5
G8
G6
G5
G6
G8
G7
45,185
48,877
94,062
4,092
4,092
21,534
1,060
31,052
53,646
43,500
45,031
88,531
4,564
4,564
1,523
31
1,609
3,163
Total depreciation, amortisation and impairment
151,800
96,258
Employee benefits expense:
Wages and salaries
Defined contribution superannuation expense
Employee entitlements
Total employee benefits expense
Finance income
Finance costs
Inventories recognised as an expense
Fair value loss on debt modification
Performance rights
Acquisition and operational integration costs expensed
Net loss on disposal of property, plant and equipment
Net (gain) / loss on disposal of leases
Gain on sale and leaseback
336,596
32,151
21,885
390,632
(1,022)
33,429
447,825
–
427
3,495
33
891
–
295,472
26,313
17,402
339,187
–
30,207
373,821
945
1,200
2,932
217
(2,684)
(1,238)
B2: Borrowings
B3: Ratios
B4: Dividends
B1: Cash and cash equivalents
Cash at bank and on hand (1)
(1)
Included in cash at bank is an amount of $5.3 million (2022: $2.0 million), that is held under lien by the bank as security for Europe lease agreements and are therefore
not available to use by the Group. The amount is denominated in Euro at an amount of €3.2 million (2022: €1.3 million).
RECONCILIATION OF PROFIT FROM CONTINUING OPERATIONS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
2023
$000
80,236
2022
$000
97,217
Profit for the period
Adjustments for non-cash income and expense items:
Depreciation, amortisation and impairment (excluding right-of-use assets)
Depreciation and impairment of right-of-use assets
Loss on disposal of property, plant and equipment
Non-cash employee benefits expense share based payments expense
G11
(Gain) / loss on disposal of leases
(Gain)/loss on foreign exchange
Gain on sale and leaseback
Fair value loss on debt modification
Amortisation of borrowing costs
Provision for make good obligations
Provision for employee entitlements
Changes in assets and liabilities:
Receivables
Inventories
Prepayments and other assets
Share of profits of joint venture
Trade payables and accruals
Income tax payable
Deferred tax balances
Goods and services tax payable
Fringe benefits tax payable
Net operating cash flows
Notes
A4
A4
A4
A4
G2
A4
A4
2023
$000
12,746
71,871
79,929
33
891
126
–
–
489
427
(464)
1,322
(2,917)
(639)
(1,794)
5
11,946
(7,062)
(18,618)
(2,120)
45
2022
$000
54,799
49,618
46,640
217
(2,684)
(613)
(1,238)
945
1,099
1,200
58
(267)
874
(1,084)
212
5
8,292
(1,570)
225
(396)
2
146,216
156,334
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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41 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B: CASH MANAGEMENT
Collins Foods Limited has a focus on maintaining a strong balance sheet with the strategy incorporating the Group’s
expenditure, growth and acquisition requirements, and the desire to return dividends to shareholders.
B1: Cash and cash equivalents
B2: Borrowings
B3: Ratios
B4: Dividends
B1: Cash and cash equivalents
Cash at bank and on hand (1)
2023
$000
80,236
2022
$000
97,217
(1)
Included in cash at bank is an amount of $5.3 million (2022: $2.0 million), that is held under lien by the bank as security for Europe lease agreements and are therefore
not available to use by the Group. The amount is denominated in Euro at an amount of €3.2 million (2022: €1.3 million).
RECONCILIATION OF PROFIT FROM CONTINUING OPERATIONS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Profit for the period
Adjustments for non-cash income and expense items:
Depreciation, amortisation and impairment (excluding right-of-use assets)
Depreciation and impairment of right-of-use assets
Loss on disposal of property, plant and equipment
(Gain) / loss on disposal of leases
(Gain)/loss on foreign exchange
Gain on sale and leaseback
Fair value loss on debt modification
Amortisation of borrowing costs
Notes
A4
A4
A4
A4
G2
A4
A4
Non-cash employee benefits expense share based payments expense
G11
Provision for make good obligations
Provision for employee entitlements
Changes in assets and liabilities:
Receivables
Inventories
Prepayments and other assets
Share of profits of joint venture
Trade payables and accruals
Income tax payable
Deferred tax balances
Goods and services tax payable
Fringe benefits tax payable
Net operating cash flows
2023
$000
12,746
71,871
79,929
33
891
126
–
–
489
427
(464)
1,322
(2,917)
(639)
(1,794)
5
11,946
(7,062)
(18,618)
(2,120)
45
2022
$000
54,799
49,618
46,640
217
(2,684)
(613)
(1,238)
945
1,099
1,200
58
(267)
874
(1,084)
212
5
8,292
(1,570)
225
(396)
2
146,216
156,334
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 42
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B1: Cash and cash equivalents continued
RECONCILIATION OF LIABILITIES TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES
2023
At 2 May 2022
Changes from financing cash flows
Proceeds from borrowings – bank loan facilities
Repayment of borrowings and other obligations
Payments for lease principal
Dividends paid
Borrowings
LIABILITIES
Lease
liabilities
$000
$000
270,994
477,389
28,296
(25,000)
–
–
–
–
(39,863)
–
Total changes from financing cash flows
3,296
(39,863)
Other changes
Lease additions and modifications
Lease disposals
Interest expense
Interest paid (operating cash flow)
Interest paid on leases (operating cash flow)
Foreign exchange adjustments
Dividend reinvestment impact on retained earnings
Profit for the reporting period
Amortisation of loan establishment fees
At 30 April 2023
2022
At 3 May 2021
Changes from financing cash flows
Proceeds from borrowings – bank loan facilities
Repayment of borrowings and other obligations
Refinance fees paid
Payments for lease principal
Dividends paid
–
–
7,272
(7,272)
102,841
(24)
25,376
–
–
(25,376)
17,078
11,168
–
–
489
–
–
–
291,857
551,511
$000
$000
271,490
397,812
32,581
(28,000)
(1,472)
–
–
–
–
–
(36,465)
–
EQUITY
Retained
earnings
$000
87,262
–
–
–
(29,377)
(29,377)
–
–
–
–
–
–
(2,246)
12,746
-
68,385
$000
61,054
–
–
–
–
(28,591)
Total
$000
$000
28,296
(25,000)
(39,863)
(29,377)
102,841
(24)
32,648
(7,272)
(25,376)
28,246
(2,246)
12,746
489
$000
32,581
(28,000)
(1,472)
(36,465)
(28,591)
Total changes from financing cash flows
3,109
(36,465)
(28,591)
(61,947)
Other changes
Lease additions and modifications
Lease disposals
Interest expense
Interest paid (operating cash flow)
Interest paid on leases (operating cash flow)
Foreign exchange adjustments
Debt modification loss
Profit for the reporting period
Amortisation of loan establishment fees
–
–
6,647
(6,647)
141,909
(21,505)
22,679
–
–
(22,679)
(5,649)
(4,362)
945
–
1,099
–
–
–
At 1 May 2022
270,994
477,389
–
–
–
–
–
–
–
54,799
–
87,262
141,909
(21,505)
29,326
(6,647)
(22,679)
(10,011)
945
54,799
1,099
ACCOUNTING POLICY
For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand, at call deposits with banks or
financial institutions, and other short-term, highly liquid investments in money market instruments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
B2: Borrowings
AVAILABLE FINANCING FACILITIES
Used (1)
Unused
Total
Working Capital
Bank Loan
Working Capital
2023
Facility
$000
279,947
83,142
363,089
Facility
$000
13,328
23,317
36,645
2022
Bank Loan
Facility
$000
261,038
81,132
342,170
Facility
$000
11,902
22,841
34,743
(1) $845,000 (2022: $845,000) of the working capital facility has been used for bank guarantees rather than drawn down cash funding. In addition, an amount of $573,000
(2022: $1,101,000) relating to capitalised fees is not included in the above figures, but included in the total Borrowings amount on the Balance Sheet.
A subsidiary of the Company, CFG Finance Pty Limited, is the primary borrower under a Syndicated Facility Agreement. The
Syndicated Facility Agreement includes bank loan facilities (Revolving Bank Loans) and a Working Capital Facility Agreement
(Working Capital Facility). On 14 September 2021, the Group entered into a new Syndicated Facility Agreement for a total of
$200 million and €120 million, which includes both the bank loan facilities and working capital facilities. The new term of the
facility is a blend of maturities with $120 million and €75 million maturing on 31 October 2024 and the remaining $80 million and
€45 million expiring on 31 October 2026.
FACILITIES
The Revolving Bank Loans and Working Capital Facility are subject to certain financial covenants and restrictions such as net
leverage ratios, interest cover ratios and others which management believe are customary for these types of loans. During the
reporting period ended 30 April 2023, the Group maintained compliance with the financial covenants and restrictions of these
facilities. The Company and its subsidiaries (other than subsidiaries outside of the Closed Group) were registered guarantors of
all the obligations in respect of these loan facilities.
For further information on the Group's borrowings refer to notes C1 and C2.
ACCOUNTING POLICY
Bank loans are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
the Consolidated Income Statement over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities, which are not transaction costs relating to the actual draw-down of the facility, are capitalised
and amortised on a straight-line basis over the term of the facility.
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
The Group manages its capital by maintaining a strong capital base. The Group assesses its capital base by reference to its
leverage ratio, which it defines as net debt divided by total capital. Net debt is calculated as borrowings (excluding capitalised
fees) less cash and cash equivalents. Total capital is calculated as total equity as shown in the balance sheet plus net debt. At
balance date, the net leverage was 47% (2022: 17%).
B3: Ratios
CAPITAL MANAGEMENT
Net debt
Cash at bank and on hand
Borrowings
Capitalised fees
Net debt
Net leverage
Net debt
Net leverage
EBITDA per Syndicated Facility Agreement
2023
$000
80,236
2022
$000
97,217
(291,857)
(270,994)
(573)
(1,101)
(212,194)
(174,878)
2023
$000
(212,194)
144,379
1.47
2022
$000
(174,878)
150,008
1.17
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 43 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 44 of 97
43 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B2: Borrowings
AVAILABLE FINANCING FACILITIES
Used (1)
Unused
Total
2023
Working Capital
Facility
Bank Loan
Facility
Working Capital
Facility
$000
13,328
23,317
36,645
$000
279,947
83,142
363,089
$000
11,902
22,841
34,743
2022
Bank Loan
Facility
$000
261,038
81,132
342,170
(1) $845,000 (2022: $845,000) of the working capital facility has been used for bank guarantees rather than drawn down cash funding. In addition, an amount of $573,000
(2022: $1,101,000) relating to capitalised fees is not included in the above figures, but included in the total Borrowings amount on the Balance Sheet.
A subsidiary of the Company, CFG Finance Pty Limited, is the primary borrower under a Syndicated Facility Agreement. The
Syndicated Facility Agreement includes bank loan facilities (Revolving Bank Loans) and a Working Capital Facility Agreement
(Working Capital Facility). On 14 September 2021, the Group entered into a new Syndicated Facility Agreement for a total of
$200 million and €120 million, which includes both the bank loan facilities and working capital facilities. The new term of the
facility is a blend of maturities with $120 million and €75 million maturing on 31 October 2024 and the remaining $80 million and
€45 million expiring on 31 October 2026.
FACILITIES
The Revolving Bank Loans and Working Capital Facility are subject to certain financial covenants and restrictions such as net
leverage ratios, interest cover ratios and others which management believe are customary for these types of loans. During the
reporting period ended 30 April 2023, the Group maintained compliance with the financial covenants and restrictions of these
facilities. The Company and its subsidiaries (other than subsidiaries outside of the Closed Group) were registered guarantors of
all the obligations in respect of these loan facilities.
For further information on the Group's borrowings refer to notes C1 and C2.
ACCOUNTING POLICY
Bank loans are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
the Consolidated Income Statement over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities, which are not transaction costs relating to the actual draw-down of the facility, are capitalised
and amortised on a straight-line basis over the term of the facility.
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
B3: Ratios
CAPITAL MANAGEMENT
The Group manages its capital by maintaining a strong capital base. The Group assesses its capital base by reference to its
leverage ratio, which it defines as net debt divided by total capital. Net debt is calculated as borrowings (excluding capitalised
fees) less cash and cash equivalents. Total capital is calculated as total equity as shown in the balance sheet plus net debt. At
balance date, the net leverage was 47% (2022: 17%).
Net debt
Cash at bank and on hand
Borrowings
Capitalised fees
Net debt
Net leverage
Net debt
EBITDA per Syndicated Facility Agreement
Net leverage
2023
$000
80,236
2022
$000
97,217
(291,857)
(270,994)
(573)
(1,101)
(212,194)
(174,878)
2023
$000
(212,194)
144,379
1.47
2022
$000
(174,878)
150,008
1.17
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 44 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 44
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B4: Dividends
Dividends
Dividends paid of $0.27 (2022: $0.25) per fully paid share
(1)
Includes $2,246,493 relating to the Dividend Reinvestment Plan.
Franking credits
Franking credits available for subsequent reporting periods based on a tax rate of 30.0%
(2022: 30.0%)
2023
$000
(1) 31,623
2022
$000
28,591
2023
$000
2022
$000
146,478
136,540
C: FINANCIAL RISK MANAGEMENT
performance, and how the risks are managed.
C1: Financial risk management
C2: Recognised fair value measurements
C3: Derivative financial instruments
C1: Financial risk management
The above amount represents the balance of the franking account as at the end of the reporting period, adjusted for:
•
•
•
franking credits that will arise from the payment of income tax payable as at the end of the reporting period;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
Directors.
franking credits that may be prevented from being distributed in the subsequent reporting period.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of
subsidiaries were paid as dividends.
During FY23, the Group introduced a Dividend Reinvestment Plan (DRP), allowing shareholders with a registered address in
Australia and New Zealand to reinvest all or part of their dividends into additional fully paid Collins Foods Limited shares.
In FY23, 256,807 shares were issued to eligible shareholders (2022: nil) with a value of $2,246,493 (2022: nil). Refer to Note D3.
Since the end of the reporting period, the Directors of the Company have declared the payment of a fully franked final
dividend of 15.0 cents per ordinary share (2022: 15.0 cents) to be paid on 1 August 2023. The aggregate amount of the dividend
to be paid on that date, but not recognised as a liability at the end of the reporting period is $17,598,386 (2022: $17,504,417).
MARKET RISK
Foreign currency risk
ACCOUNTING POLICY
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the Company, on or before the end of the reporting period but not distributed at balance date.
(disclosed in Note B2).
This section provides information relating to the Group’s exposure to financial risks, how they affect the financial position and
The Board of Directors has delegated specific authorities to the central finance department in relation to financial risk
management. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Group’s
operating units. The Board has provided written policies covering the management of interest rate risk and the use of derivative
financial instruments. All significant decisions relating to financial risk management require specific approval by the Board of
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest risk and price risk), credit
risk and liquidity risk. In addition, the Group manages its capital base. The Group's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. The Group’s activities expose it primarily to the financial risk of changes in interest rates and it utilises Swap Contracts to
manage its interest rate risk exposure. The use of financial instruments is governed by the Group’s policies approved by the
Board of Directors and are not entered into for speculative purposes.
During 2023 and 2022, the financial instruments of the Group and the parent entity were denominated in Australian dollars apart
from certain bank accounts, trade receivables, trade payables and borrowings in respect of the Group’s Asian and European
operations which were denominated in foreign currencies at the Group level. In respect of its European operations the Group
aims to reduce balance sheet translation exposure by borrowing in the currency of its assets (Euro €) as far as practical
Management has decided not to hedge the foreign currency risk exposure for Asia. The Group’s exposure to foreign currency
risk is disclosed in the tables below.
Hedge of net investment in foreign investment
As at 25 August 2017, €48.3 million of the Euro denominated loan of €48.5 million was designated as the hedging instrument of a
net investment hedge for the foreign currency risk exposure of €48.3 million of the Euro equity invested in Collins Foods Europe
Limited (and subsidiaries). Due to a restructure of the European operations during FY23, the European investment is now
subscribed in Collins Foods Holding Europe Holdings B.V. (and subsidiaries). As at inception in 2017, this hedge was considered to
be completely effective and there has been no change to this designation as a result of the restructuring of operations.
Cash flow and interest rate risk
The Group’s main interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk while borrowings issued at fixed rates expose the Group to fair value interest rate risk.
It is the policy of the Group to protect a designated portion of the loans from exposure to increasing interest rates. Accordingly,
the Group has entered into interest rate swap contracts (Swap Contracts) under which it is obliged to receive interest at
variable rates and to pay interest at fixed rates.
Information about the Group's variable rate borrowings, outstanding Swap Contracts and an analysis of maturities at the
reporting date is disclosed in Notes C1 and C3.
The Group manages commodity price risk by forward contracting prices on key commodities and by being actively involved in
Price risk
CREDIT RISK
relevant supply co-operatives.
Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits with banks, other trade receivables
and receivables from related parties. The Group has adopted a policy of only dealing with creditworthy counterparties and in
the situation of no independent rating being available, will assess the credit quality of the customer taking into account its
financial position, past experience and other factors.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 45 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 46 of 97
45 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C: FINANCIAL RISK MANAGEMENT
This section provides information relating to the Group’s exposure to financial risks, how they affect the financial position and
performance, and how the risks are managed.
C1: Financial risk management
C2: Recognised fair value measurements
C3: Derivative financial instruments
C1: Financial risk management
The Board of Directors has delegated specific authorities to the central finance department in relation to financial risk
management. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Group’s
operating units. The Board has provided written policies covering the management of interest rate risk and the use of derivative
financial instruments. All significant decisions relating to financial risk management require specific approval by the Board of
Directors.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, interest risk and price risk), credit
risk and liquidity risk. In addition, the Group manages its capital base. The Group's overall risk management program focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. The Group’s activities expose it primarily to the financial risk of changes in interest rates and it utilises Swap Contracts to
manage its interest rate risk exposure. The use of financial instruments is governed by the Group’s policies approved by the
Board of Directors and are not entered into for speculative purposes.
MARKET RISK
Foreign currency risk
During 2023 and 2022, the financial instruments of the Group and the parent entity were denominated in Australian dollars apart
from certain bank accounts, trade receivables, trade payables and borrowings in respect of the Group’s Asian and European
operations which were denominated in foreign currencies at the Group level. In respect of its European operations the Group
aims to reduce balance sheet translation exposure by borrowing in the currency of its assets (Euro €) as far as practical
(disclosed in Note B2).
Management has decided not to hedge the foreign currency risk exposure for Asia. The Group’s exposure to foreign currency
risk is disclosed in the tables below.
Hedge of net investment in foreign investment
As at 25 August 2017, €48.3 million of the Euro denominated loan of €48.5 million was designated as the hedging instrument of a
net investment hedge for the foreign currency risk exposure of €48.3 million of the Euro equity invested in Collins Foods Europe
Limited (and subsidiaries). Due to a restructure of the European operations during FY23, the European investment is now
subscribed in Collins Foods Holding Europe Holdings B.V. (and subsidiaries). As at inception in 2017, this hedge was considered to
be completely effective and there has been no change to this designation as a result of the restructuring of operations.
Cash flow and interest rate risk
The Group’s main interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk while borrowings issued at fixed rates expose the Group to fair value interest rate risk.
It is the policy of the Group to protect a designated portion of the loans from exposure to increasing interest rates. Accordingly,
the Group has entered into interest rate swap contracts (Swap Contracts) under which it is obliged to receive interest at
variable rates and to pay interest at fixed rates.
Information about the Group's variable rate borrowings, outstanding Swap Contracts and an analysis of maturities at the
reporting date is disclosed in Notes C1 and C3.
Price risk
The Group manages commodity price risk by forward contracting prices on key commodities and by being actively involved in
relevant supply co-operatives.
CREDIT RISK
Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits with banks, other trade receivables
and receivables from related parties. The Group has adopted a policy of only dealing with creditworthy counterparties and in
the situation of no independent rating being available, will assess the credit quality of the customer taking into account its
financial position, past experience and other factors.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 46 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 46
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C1: Financial risk management continued
Trade receivables consist of a small number of customers and ongoing review of outstanding balances is conducted on a
periodic basis. The balance outstanding (disclosed in Note G4) is not past due, nor impaired (2022: nil past due). The credit risk
on liquid funds and derivative financial instruments is limited as the counterparties are banks with high credit ratings assigned by
international credit rating agencies.
Related party transactions are conducted on commercial terms and conditions. Recoverability of these transactions are
assessed on an ongoing basis.
Credit risk further arises in relation to financial guarantees given to certain parties (refer to Notes B2 and H1 for details).
LIQUIDITY RISK
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve banking facilities by
continuously monitoring forecast and actual cash flows. This approach enables the Group to manage short, medium and long
term funding and liquidity management as reported in Note B2. Non-interest-bearing liabilities are due within six months. For
maturities of interest-bearing liabilities and Swap Contracts of the Group, refer to Notes C1 and C3.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities
for:
• all non-derivative financial liabilities; and
• net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding
Interest rate risk exposures – non-current liabilities
of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of discounting is not significant. For Swap Contracts the cash flows have been estimated using
forward interest rates applicable at the end of each reporting period. Despite Swap Contracts being in a receivable position for
the current reporting period, they have been included below for comparability to the prior year reporting period.
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
Total
contractual
cash flows
Carrying
amount
(assets)/
liabilities
Note
$000
$000
$000
$000
$000
G9
B3
C3
Note
G9
B3
116,515
13,201
129,716
(3,428)
$000
116,473
5,310
121,783
–
222,199
222,199
(1,710)
$000
–
5,520
5,520
–
82,723
82,723
(158)
$000
–
278,181
278,181
116,515
318,123
434,638
(5,296)
$000
116,473
289,011
405,484
116,515
291,857
408,372
(5,146)
$000
116,473
270,994
387,467
2023
Non-derivatives
Trade payables
Borrowings (excluding finance leases)
Total non-derivatives
Derivatives
Net settled (Swap Contracts)
2022
Non-derivatives
Trade payables
Borrowings (excluding finance leases)
Total non-derivatives
Derivatives
Net settled (Swap Contracts)
C3
(675)
(1,710)
(1,239)
(3,624)
(3,446)
C1: Financial risk management continued
Interest rate risk and foreign currency risk
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk and
foreign currency risk only, as the Group is not exposed to other market risks:
2023
Financial assets
Financial liabilities
2022
Financial assets
Financial liabilities
Interest rate risk
Foreign currency risk
-1%
+1%
-1%
+1%
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
(562)
(2,675)
562
2,675
555
–
(555)
–
514
–
(514)
–
(387)
1,649
387
(1,649)
$000
$000
$000
$000
$000
$000
$000
$000
$000
(681)
(1,967)
681
1,967
254
–
(254)
–
847
–
(847)
–
(374)
1,210
374
(1,210)
Carrying
amount
105,481
410,386
104,863
392,981
Total increase/(decrease)
(48)
(2,675)
48
2,675
168
1,649
(168)
(1,649)
Total increase/(decrease)
166
(1,967)
(166)
1,967
(120)
1,210
120
(1,210)
The following table summarises interest rate risk for the Group, together with effective interest rates as at the end of the reporting
period.
2023
Notes
$000
$000
Floating
Fixed interest
Non-interest
Total
interest rate
maturing in:
bearing
2 - 4 years
Weighted
average
effective rate
–
–
–
–
206,511
12,484
218,995
$000
140,000
11,057
151,057
$000
116,515
116,515
$000
116,473
–
–
–
–
–
–
$000
116,515
73,435
206,511
12,484
408,945
$000
116,473
121,038
140,000
11,057
388,568
%
–
4.5%
1.9%
4.2%
%
–
1.3
0.8
1.3
121,038
116,473
Trade and other payables
Borrowings - unhedged
Borrowings - hedged (1)
Borrowings - working capital
2022
Notes
Trade and other payables
Borrowings - unhedged
Borrowings - hedged (1)
Borrowings - working capital
G9
B2
B2
B2
G9
B2
B2
B2
73,435
73,435
$000
121,038
–
–
–
–
–
–
(1) Refer Note C3 for details of derivative financial instruments.
Interest rate risk exposures - current asset receivables
The Group’s exposure to interest rate risk and the average interest rate by maturity period is set out in the following table:
Trade and other receivables (non-interest bearing)
G4
CREDIT RISK
There is no concentration of credit risk with respect to external current and non-current receivables.
2023
$000
20,099
2022
$000
4,200
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 47 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 48 of 97
47 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C1: Financial risk management continued
Interest rate risk and foreign currency risk
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk and
foreign currency risk only, as the Group is not exposed to other market risks:
Carrying
amount
-1%
+1%
-1%
+1%
Profit
Equity
Profit
Equity
Profit
Equity
Profit
Equity
Interest rate risk
Foreign currency risk
2023
Financial assets
Financial liabilities
$000
$000
$000
$000
$000
$000
$000
$000
$000
105,481
410,386
(562)
(2,675)
562
2,675
555
–
(555)
–
514
–
(514)
–
(387)
1,649
387
(1,649)
Total increase/(decrease)
(48)
(2,675)
48
2,675
168
1,649
(168)
(1,649)
2022
Financial assets
Financial liabilities
$000
$000
$000
$000
$000
$000
$000
$000
$000
104,863
392,981
(681)
(1,967)
681
1,967
254
–
(254)
–
847
–
(847)
–
(374)
1,210
374
(1,210)
Total increase/(decrease)
166
(1,967)
(166)
1,967
(120)
1,210
120
(1,210)
Interest rate risk exposures – non-current liabilities
The following table summarises interest rate risk for the Group, together with effective interest rates as at the end of the reporting
period.
2023
Trade and other payables
Borrowings - unhedged
Borrowings - hedged (1)
Borrowings - working capital
2022
Trade and other payables
Borrowings - unhedged
Borrowings - hedged (1)
Borrowings - working capital
Notes
G9
B2
B2
B2
Notes
G9
B2
B2
B2
Floating
interest rate
Fixed interest
maturing in:
2 - 4 years
Non-interest
bearing
Total
Weighted
average
effective rate
$000
–
73,435
–
–
73,435
$000
–
121,038
–
–
121,038
$000
–
–
206,511
12,484
218,995
$000
–
–
140,000
11,057
151,057
$000
116,515
–
–
–
116,515
$000
116,473
–
–
–
116,473
$000
116,515
73,435
206,511
12,484
408,945
$000
116,473
121,038
140,000
11,057
388,568
%
–
4.5%
1.9%
4.2%
%
–
1.3
0.8
1.3
(1) Refer Note C3 for details of derivative financial instruments.
Interest rate risk exposures - current asset receivables
The Group’s exposure to interest rate risk and the average interest rate by maturity period is set out in the following table:
Trade and other receivables (non-interest bearing)
G4
CREDIT RISK
There is no concentration of credit risk with respect to external current and non-current receivables.
2023
$000
20,099
2022
$000
4,200
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 48 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C2: Recognised fair value measurements
C2: Recognised fair value measurements continued
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
FAIR VALUE HIERARCHY
Judgements and estimates are made in determining the fair values of assets and liabilities that are recognised and measured at
fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value,
the Group has classified such assets and liabilities into the three levels prescribed under the accounting standards.
Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3, based on
the degree to which the fair value is observable. The different levels have been identified as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and
•
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements
approximate their fair values.
As at 30 April 2023, the Group has derivative financial instruments which are classified as Level 2 financial instruments. There are
no Level 1 or Level 3 financial instruments. As at 1 May 2022, the Group had derivative financial instruments which were
classified as Level 2 financial instruments.
LEVEL 2 FINANCIAL INSTRUMENTS
The fair values of derivative instruments are determined as the estimated amount that the Group and the Company would
receive or pay to terminate the interest rate swap at the end of the reporting period, taking into account the current interest
rate.
VALUATION PROCESSES
The finance department of the Group engages a third-party expert valuation firm to value the derivative financial instruments
that are required to be measured, recognised and disclosed in the financial statements, at fair value. This includes Level 2 fair
values. The finance department reports directly to the Group CFO and the Audit and Risk Committee. Discussions of valuation
processes and results are held between the Group CFO, Audit and Risk Committee, and the finance department at least once
every six months, in line with the Group's half-year reporting periods.
The main Level 2 inputs used by the Group are derived and evaluated as follows:
• discount rates for financial assets and financial liabilities are determined using a capital asset pricing model to calculate a
pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.
Changes in Level 2 and Level 3 (if any) fair values are analysed at the end of each reporting period during the half-year
valuation discussion between the Group CFO, Audit and Risk Committee, and finance department. As part of this discussion the
finance department presents a report that explains the reason for the fair value movements.
DISCLOSED FAIR VALUES
The Group also has assets and liabilities which are not measured at fair value, but for which fair values are disclosed in the notes
to the financial statements.
Receivables
Due to the short term nature of the current receivables, their carrying amount is assumed to be the same as their fair value. For
the majority of non-current receivables, the fair values are not materially different to their carrying amounts, since the interest on
those receivables is close to current market rates.
Trade and other payables
Due to the short term nature of the trade and other payables, their carrying amount is assumed to be the same as their fair
value.
Borrowings
The fair value of borrowings is as follows:
Carrying
amount
$000
Fair
value
$000
Carrying
amount
$000
Fair
value
$000
2023
Discount
rate
%
4.5%
2022
Discount
rate
%
4.1
Bank Loan (net of borrowing costs)
291,857
285,608
270,994
252,374
The fair value of non-current borrowings is based on discounted cash flows using the rate disclosed in the table above. They are
classified as Level 2 values in the fair value hierarchy due to the use of observable inputs, including the credit risk of the Group.
ACCOUNTING POLICY
FINANCIAL ASSETS
Classification and measurement
The Group classifies its financial assets into the following categories: those to be measured subsequently at fair value (either
through other comprehensive income or through the income statement) and those to be held at amortised cost. Further detail
on each classification is outlined below.
Classification depends on the business model for managing the financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial recognition. The Group’s policy with regard to financial
risk management is set out in Note C1. Generally, the Group does not acquire financial assets for the purpose of selling in the
short term. The Group’s business model is primarily that of ‘hold to collect’ (where assets are held in order to collect contractual
cash flows). When the Group enters into derivative contracts, these transactions are designed to reduce exposures relating to
assets and liabilities, firm commitments or anticipated transactions.
(a) Financial assets held at amortised cost
This classification applies to debt instruments which are held under a hold to collect business model, and which have cash flows
that meet the ‘Solely payments of principal and interest’ (SPPI) criteria.
At initial recognition, trade receivables that do not have a significant financing component, are recognised at their transaction
price. Other financial assets are initially recognised at fair value plus related transaction costs; they are subsequently measured
at amortised cost using the effective interest method. Any gain or loss on de-recognition or modification of a financial asset
held at amortised cost is recognised in the income statement.
(b) Financial assets held at Fair Value through Other Comprehensive Income (FVOCI)
This classification applies to the following financial assets:
• Debt instruments that are held under a business model where they are held for the collection of contractual cash flows and
also for sale (‘Collect and sell’) and which have cash flows that meet the SPPI criteria.
All movements in the fair value of these financial assets are taken through other comprehensive income, except for the
recognition of impairment gains or losses, interest revenue (including transaction costs by applying the effective interest
method), gains or losses arising on derecognition and foreign exchange gains and losses which are recognised in the income
statement. When the financial asset is derecognised, the cumulative fair value gain or loss previously recognised in other
comprehensive income is reclassified to the income statement.
• Equity investments where the Group has irrevocably elected to present fair value gains and losses on revaluation in other
comprehensive income. The election can be made for each individual investment however it is not applicable to equity
investments held for trading.
Fair value gains or losses on revaluation of such equity investments, including any foreign exchange component, are recognised
in other comprehensive income. When the equity investment is derecognised, there is no reclassification of fair value gains or
losses previously recognised in other comprehensive income to the income statement. Dividends are recognised in the income
statement when the right to receive payment is established.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 49 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 50 of 97
49 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C2: Recognised fair value measurements continued
Borrowings
The fair value of borrowings is as follows:
Bank Loan (net of borrowing costs)
291,857
285,608
Carrying
amount
$000
Fair
value
$000
2023
Discount
rate
%
4.5%
Carrying
amount
$000
Fair
value
$000
270,994
252,374
2022
Discount
rate
%
4.1
The fair value of non-current borrowings is based on discounted cash flows using the rate disclosed in the table above. They are
classified as Level 2 values in the fair value hierarchy due to the use of observable inputs, including the credit risk of the Group.
ACCOUNTING POLICY
FINANCIAL ASSETS
Classification and measurement
The Group classifies its financial assets into the following categories: those to be measured subsequently at fair value (either
through other comprehensive income or through the income statement) and those to be held at amortised cost. Further detail
on each classification is outlined below.
Classification depends on the business model for managing the financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial recognition. The Group’s policy with regard to financial
risk management is set out in Note C1. Generally, the Group does not acquire financial assets for the purpose of selling in the
short term. The Group’s business model is primarily that of ‘hold to collect’ (where assets are held in order to collect contractual
cash flows). When the Group enters into derivative contracts, these transactions are designed to reduce exposures relating to
assets and liabilities, firm commitments or anticipated transactions.
(a) Financial assets held at amortised cost
This classification applies to debt instruments which are held under a hold to collect business model, and which have cash flows
that meet the ‘Solely payments of principal and interest’ (SPPI) criteria.
At initial recognition, trade receivables that do not have a significant financing component, are recognised at their transaction
price. Other financial assets are initially recognised at fair value plus related transaction costs; they are subsequently measured
at amortised cost using the effective interest method. Any gain or loss on de-recognition or modification of a financial asset
held at amortised cost is recognised in the income statement.
(b) Financial assets held at Fair Value through Other Comprehensive Income (FVOCI)
This classification applies to the following financial assets:
• Debt instruments that are held under a business model where they are held for the collection of contractual cash flows and
also for sale (‘Collect and sell’) and which have cash flows that meet the SPPI criteria.
All movements in the fair value of these financial assets are taken through other comprehensive income, except for the
recognition of impairment gains or losses, interest revenue (including transaction costs by applying the effective interest
method), gains or losses arising on derecognition and foreign exchange gains and losses which are recognised in the income
statement. When the financial asset is derecognised, the cumulative fair value gain or loss previously recognised in other
comprehensive income is reclassified to the income statement.
• Equity investments where the Group has irrevocably elected to present fair value gains and losses on revaluation in other
comprehensive income. The election can be made for each individual investment however it is not applicable to equity
investments held for trading.
Fair value gains or losses on revaluation of such equity investments, including any foreign exchange component, are recognised
in other comprehensive income. When the equity investment is derecognised, there is no reclassification of fair value gains or
losses previously recognised in other comprehensive income to the income statement. Dividends are recognised in the income
statement when the right to receive payment is established.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 50 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 50
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C2: Recognised fair value measurements continued
(c) Financial assets held at Fair Value through Profit or Loss (FVPL)
This classification applies to the following financial assets, and in all cases, transactions costs are immediately expensed to the
income statement:
are as follows:
• Debt instruments that do not meet the criteria of amortised cost or fair value through other comprehensive income.
Subsequent fair value gains or losses are taken to the income statement.
• Equity Investments which are held for trading or where the FVOCI election has not been applied.
All fair value gains or losses and related dividend income are recognised in the income statement.
• Derivatives which are not designated as a hedging instrument.
All subsequent fair value gains or losses are recognised in the income statement.
Impairment of financial assets
A forward-looking expected credit loss (ECL) review is required for:
• debt instruments measured at amortised cost or held at fair value through other comprehensive income;
•
•
loan commitments and financial guarantees not measured at fair value through profit or loss; and
lease receivables and trade receivables that give rise to an unconditional right to consideration.
C3: Derivative financial instruments
Current assets
Interest rate swap contracts - cash flow hedges
Non-current assets
Interest rate swap contracts - cash flow hedges
INSTRUMENTS USED BY THE GROUP
2023
$000
3,367
1,779
2022
$000
662
2,784
The Group is party to derivative financial instruments in the normal course of business in order to hedge exposure to fluctuations
in interest rates in accordance with the Group’s financial risk management policies.
Hedge accounting
INTEREST RATE SWAP CONTRACTS – CASH FLOW HEDGES
The following Swap Contracts were entered into in the 2023 reporting period, and commenced on the dates outlined below, to
hedge a designated portion of the interest rate exposure of the facility:
• $20.0 million commenced on 30 October 2022 with a maturity date of 30 October 2024;
• $25.0 million commenced on 31 October 2022 with a maturity date of 31 October 2024;
• $30.0 million commenced on 31 October 2022 with a maturity date of 30 October 2024;
• $15.0 million commenced on 31 October 2022 with a maturity date of 30 October 2026;
• €30.0 million commenced on 4 January 2023 with a maturity date of 31 October 2024;
• €10.0 million commenced on 4 January 2023 with a maturity date of 31 October 2024;
• €14.5 million commenced on 4 January 2023 with a maturity date of 31 October 2024; and
• €15.5 million commenced on 4 January 2023 with a maturity date of 30 October 2026.
These Swap Contracts remain active as at 30 April 2023.
The Swap Contracts entered into during FY21 had a maturity date of 31 October 2022 and these terminated during FY23.
C3: Derivative financial instruments continued
Swap Contracts currently in place cover approximately 80% (2022: 100%) of the Australian dollar denominated loan principal
outstanding and are timed to expire as each loan repayment falls due. The variable rates are BBSY which at balance date was
3.68% (2022: 0.22%). The notional principal amounts, periods of expiry and fixed interest rates applicable to the Swap Contracts
Weighted average
fixed interest rate
Weighted average
fixed interest rate
2023
%
–
–
1.8%
2.5%
2022
%
0.8%
–
–
–
$000
140,000
–
–
–
140,000
$000
–
–
165,712
40,799
206,511
Less than 1 year
1 - 2 years
2 – 3 years
3 – 4 years
CREDIT RISK EXPOSURES
financial institutions.
ACCOUNTING POLICY
including interest rate swaps.
The Swap Contracts require settlement of net interest receivable or payable each month. The Swap Contracts are settled on a
net basis. The derivative financial instruments were designated as cash flow hedges at inception.
At 30 April 2023, the Swap Contracts gave rise to receivables for unrealised gains on derivative instruments of $5.15 million
(2022: $3.45 million receivable on unrealised gains) for the Group. Management has undertaken these contracts with the
Australia and New Zealand Banking Group Limited, Westpac Banking Corporation and Rabobank, all of which are AA rated
The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks,
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
The Group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in fair
value hedges, cash flow hedges, or hedges of net investments in foreign operations as appropriate. Hedges of foreign
exchange risk on firm commitments are accounted for as cash flow hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the
hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is
effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the
hedging relationships meet all of the hedge effectiveness requirements prescribed in AASB 9 Financial Instruments.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk
management objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio of the
hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again.
Cash flow hedges
The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated
and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash
flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain
or loss relating to the ineffective portion is recognised immediately in profit or loss.
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria. This includes instances when the hedging instrument expires or is sold, terminated, or exercised. The discontinuation is
accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in equity at that
time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast
transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 51 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 52 of 97
51 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C3: Derivative financial instruments continued
Swap Contracts currently in place cover approximately 80% (2022: 100%) of the Australian dollar denominated loan principal
outstanding and are timed to expire as each loan repayment falls due. The variable rates are BBSY which at balance date was
3.68% (2022: 0.22%). The notional principal amounts, periods of expiry and fixed interest rates applicable to the Swap Contracts
are as follows:
Less than 1 year
1 - 2 years
2 – 3 years
3 – 4 years
2023
Weighted average
fixed interest rate
2022
Weighted average
fixed interest rate
$000
–
165,712
–
40,799
206,511
%
–
1.8%
–
2.5%
$000
140,000
–
–
–
140,000
%
0.8%
–
–
–
The Swap Contracts require settlement of net interest receivable or payable each month. The Swap Contracts are settled on a
net basis. The derivative financial instruments were designated as cash flow hedges at inception.
CREDIT RISK EXPOSURES
At 30 April 2023, the Swap Contracts gave rise to receivables for unrealised gains on derivative instruments of $5.15 million
(2022: $3.45 million receivable on unrealised gains) for the Group. Management has undertaken these contracts with the
Australia and New Zealand Banking Group Limited, Westpac Banking Corporation and Rabobank, all of which are AA rated
financial institutions.
ACCOUNTING POLICY
The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks,
including interest rate swaps.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss
immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
Hedge accounting
The Group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in fair
value hedges, cash flow hedges, or hedges of net investments in foreign operations as appropriate. Hedges of foreign
exchange risk on firm commitments are accounted for as cash flow hedges.
At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the
hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is
effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the
hedging relationships meet all of the hedge effectiveness requirements prescribed in AASB 9 Financial Instruments.
If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk
management objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio of the
hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again.
Cash flow hedges
The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated
and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash
flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain
or loss relating to the ineffective portion is recognised immediately in profit or loss.
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying
criteria. This includes instances when the hedging instrument expires or is sold, terminated, or exercised. The discontinuation is
accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in equity at that
time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast
transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 52 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 52
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C3: Derivative financial instruments continued
Hedges of net investments in foreign operations
D: REWARD AND RECOGNITION
These programs also result in changes to the Group’s contributed equity.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the
hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and
accumulated under the heading of foreign currency translation reserve. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss.
Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency
translation reserve are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do
not meet the hedge accounting criteria, they are classified as ‘held for trading’ for accounting purposes and are accounted
for at fair value through profit or loss. They are presented as current assets or liabilities to the extent they are expected to be
settled within 12 months after the end of the reporting period.
D1: Key management personnel
D2: Share based payments
D3: Contributed equity
D1: Key management personnel
KMP COMPENSATION
Short term employee benefits
Long term employee benefits
Post-employment benefits
Share based payments
Termination benefit
Total KMP compensation
2023
2022
Whole Dollars
Whole Dollars
4,748,398
5,536,290
$
–
216,021
20,408
146,659
$
–
–
162,792
815,551
5,131,486
6,514,633
Detailed remuneration disclosures are provided in the Remuneration Report included in the Directors’ Report.
D2: Share based payments
LONG TERM INCENTIVE PLAN – PERFORMANCE RIGHTS
The Company has a Long Term Incentive Plan (LTIP) designed to provide long term incentives for certain employees, including
executive directors. Under the plan, participants are granted performance rights over shares. The number of performance rights
is calculated by dividing the dollar value of the participant’s long term incentive by the ASX volume weighted average price of
the shares for the five trading days prior and five trading days after the release of the audited financial results.
Unless otherwise determined by the Board in its discretion, performance rights are issued for nil consideration. The amount of
performance rights that will vest depends upon the achievement of certain vesting conditions, including the satisfaction of a
minimum 12 month term of employment and achieving performance targets. In FY22, the Board introduced a second
performance target with 50% of the grant having a Compound earnings per share (EPS) growth target and the remaining 50%
having a relative total shareholder return (RTSR) target. In the event of cessation of employment within 12 months of the date of
grant, unvested rights are forfeited. In the event of cessation of employment after 12 months but before the conclusion of the
vesting period, unvested rights are considered forfeited, unless otherwise determined by the Board, in which case any service
condition will be deemed to have been fulfilled as at the testing date and subject to performance testing along with other
participants. It is noted that the Board has discretion to allow “Good Leavers” to retain their Participation in the LTI plan beyond
the date of cessation of employment when deemed appropriate to the circumstances. The EPS growth and TSR targets must be
achieved over a three year performance period. Performance rights will automatically vest on the business day after the Board
determines the vesting conditions have all been satisfied (Vesting Determination Date).
The performance rights will automatically exercise on the Vesting Determination Date unless that date occurs outside a trading
window permitted under the Company’s Securities Trading Policy, in which case the performance rights will exercise upon the
first day of the next trading window. Upon exercise of the performance rights, the Company must issue or procure the transfer of
one share for each performance right, or alternatively may in its discretion elect to pay the cash equivalent value to the
Performance rights will lapse on the first to occur of:
participant.
the expiry date;
•
•
the vesting conditions not being satisfied by the Vesting Determination Date;
• unless the Board otherwise determines, by the cessation of the employment of the employee to whom the offer of
performance rights was made. The Board determination will depend upon the reason for employment ceasing (resignation,
dismissal for cause, death or illness).
Performance rights when issued under the LTIP are not entitled to receive a dividend and carry no voting rights.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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53 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D: REWARD AND RECOGNITION
These programs also result in changes to the Group’s contributed equity.
D1: Key management personnel
D2: Share based payments
D3: Contributed equity
D1: Key management personnel
KMP COMPENSATION
Short term employee benefits
Long term employee benefits
Post-employment benefits
Share based payments
Termination benefit
Total KMP compensation
2023
Whole Dollars
$
2022
Whole Dollars
$
4,748,398
5,536,290
–
216,021
20,408
146,659
–
162,792
815,551
–
5,131,486
6,514,633
Detailed remuneration disclosures are provided in the Remuneration Report included in the Directors’ Report.
D2: Share based payments
LONG TERM INCENTIVE PLAN – PERFORMANCE RIGHTS
The Company has a Long Term Incentive Plan (LTIP) designed to provide long term incentives for certain employees, including
executive directors. Under the plan, participants are granted performance rights over shares. The number of performance rights
is calculated by dividing the dollar value of the participant’s long term incentive by the ASX volume weighted average price of
the shares for the five trading days prior and five trading days after the release of the audited financial results.
Unless otherwise determined by the Board in its discretion, performance rights are issued for nil consideration. The amount of
performance rights that will vest depends upon the achievement of certain vesting conditions, including the satisfaction of a
minimum 12 month term of employment and achieving performance targets. In FY22, the Board introduced a second
performance target with 50% of the grant having a Compound earnings per share (EPS) growth target and the remaining 50%
having a relative total shareholder return (RTSR) target. In the event of cessation of employment within 12 months of the date of
grant, unvested rights are forfeited. In the event of cessation of employment after 12 months but before the conclusion of the
vesting period, unvested rights are considered forfeited, unless otherwise determined by the Board, in which case any service
condition will be deemed to have been fulfilled as at the testing date and subject to performance testing along with other
participants. It is noted that the Board has discretion to allow “Good Leavers” to retain their Participation in the LTI plan beyond
the date of cessation of employment when deemed appropriate to the circumstances. The EPS growth and TSR targets must be
achieved over a three year performance period. Performance rights will automatically vest on the business day after the Board
determines the vesting conditions have all been satisfied (Vesting Determination Date).
The performance rights will automatically exercise on the Vesting Determination Date unless that date occurs outside a trading
window permitted under the Company’s Securities Trading Policy, in which case the performance rights will exercise upon the
first day of the next trading window. Upon exercise of the performance rights, the Company must issue or procure the transfer of
one share for each performance right, or alternatively may in its discretion elect to pay the cash equivalent value to the
participant.
Performance rights will lapse on the first to occur of:
•
•
the expiry date;
the vesting conditions not being satisfied by the Vesting Determination Date;
• unless the Board otherwise determines, by the cessation of the employment of the employee to whom the offer of
performance rights was made. The Board determination will depend upon the reason for employment ceasing (resignation,
dismissal for cause, death or illness).
Performance rights when issued under the LTIP are not entitled to receive a dividend and carry no voting rights.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 54
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D2: Share based payments continued
Set out below are summaries of performance rights issued under the LTIP:
Performance rights
Balance at the beginning of the reporting period
Vested and exercised
Issued during the reporting period
Lapsed during the reporting period
Balance at the end of the reporting period
2023
637,285
(85,564)
424,650
(86,116)
890,255
2022
653,255
(114,866)
298,175
(199,279)
637,285
During the 2020 financial year, grants under the long-term incentive plan were made with a performance period of FY20, FY21
and FY22 (FY20 Grant). Based upon the EPS growth achieved over the three year performance period (FY20-FY22), 85,564
performance rights (Vesting Rights) granted under the LTIP converted to fully paid ordinary shares. Each participant was issued
shares based on the volume weighted average price of $9.59.
All performance rights issued during the reporting period ended 30 April 2023 have an expiry date of 25 July 2025 and were
issued with an exercise price of nil. All performance rights issued during the reporting period ended 1 May 2022 have an expiry
date of 24 July 2024 and were issued with an exercise price of nil.
FAIR VALUE OF PERFORMANCE RIGHTS ISSUED
There was one tranche of performance rights issued during the reporting period ended 30 April 2023:
•
•
The assessed fair value of performance rights (with an EPS growth target) issued on 21 September 2022 was $8.74.
The fair value at grant date was determined using a discounted cash flow model incorporating the share price at grant
date of $9.34, the term of the right, the expected dividend yield of 2.31% and the risk free interest rate for the term of the
rights of 3.33%.
The assessed fair value at grant date of performance rights (with TSR target) was determined using a Monte Carlo simulation
model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest
rate for the term of the option and the correlations and volatilities of the peer group companies.
The model inputs for performance rights granted with a TSR target during the reporting period ended 30 April 2023 included:
Assumption
Fair value
Expiry date
Share price at Grant date
Term (years)
Expected dividend yield
Risk free interest rate
21 September 2022:
$5.39
25 July 2025
$9.34
3.0
2.31%
3.33%
There were two tranches of performance rights issued during the reporting period ended 1 May 2022:
•
•
•
The assessed fair value of performance rights (with an EPS growth target) issued on 14 September 2021 was $11.76.
The fair value at grant date was determined using a discounted cash flow model incorporating the share price at grant
date of $12.45, the term of the right, the expected dividend yield of 1.85% and the risk free interest rate for the term of the
rights of 0.16%.
The assessed fair value of performance rights (with an EPS growth target) issued on 1 January 2022 was $12.69.
The fair value at grant date was determined using a discounted cash flow model incorporating the share price at grant
date of $13.37, the term of the right, the expected dividend yield of 1.72% and the risk free interest rate for the term of the
rights of 0.75%.
The assessed fair value at grant date of performance rights (with TSR target) was determined using a Monte Carlo simulation
model that takes into account the exercise price, the term of the option, the impact of dilution (where material), the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest
rate for the term of the option and the correlations and volatilities of the peer group companies.
D2: Share based payments continued
Assumption
Fair value
Expiry date
Share price at Grant date
Term (years)
Expected dividend yield
Risk free interest rate
Grant date
14 September 2021
1 January 2022
$7.54
$8.62
24 July 2024
24 July 2024
$12.45
3.0
1.91%
0.11%
$13.37
3.0
1.91%
0.78%
OWNERSHIP SHARE PLAN – PERFORMANCE RIGHTS
During FY23, the Group established an Ownership Share Plan (OSP) designed to maintain and enhance a performance centred
environment for eligible Restaurant General Managers (RGMs), Area Coaches (ACs) and Restaurant Support Centre (RSC)
employees. The OSP aims to reflect current market conditions and to ensure remuneration practices remain competitive. Under
the plan, participants are granted performance rights over shares. The number of performance rights is calculated by dividing
the dollar value of the employee’s grant by the ASX volume weighted average price of the shares for the five trading days prior
and five days after the release of the audited financial results. Each annual grant spans a five year period and will vest in 5
separate tranches, each with a distinct service period. Employees who are participants of any other Group Share Scheme (e.g.
LTIP) are ineligible to participate in the OSP.
Unless otherwise determined by the Board in its discretion, performance rights are issued for nil consideration. The amount of
performance rights that will vest depends upon the satisfaction of a service condition, with one-fifth (20%) of each employee’s
entitlement vesting annually, providing that employee remains employed by the Group. There are no performance conditions
attached the rights granted under the OSP.
Set out below are summaries of performance rights issued under the OSP:
Performance rights
Balance at the beginning of the reporting period
Vested and exercised
Issued during the reporting period
Lapsed during the reporting period
Balance at the end of the reporting period
2023
2022
–
–
–
239,535
239,535
–
–
–
–
–
FAIR VALUE OF PERFORMANCE RIGHTS ISSUED UNDER THE OSP
•
The assessed fair values of performance rights issued on 27 April 2023 ranged from $7.70 to $8.43. The fair value at grant date
was determined using a discounted cash flow model incorporating the share price at grant date of $8.70, the term of the
right, the expected dividend yield of 3.1% and the risk-free interest rate for the term of the rights ranging from 3.01% to 3.05%.
EXPENSES ARISING FROM SHARE BASED PAYMENT TRANSACTIONS
Total expenses arising from share based payment transactions (LTIP and OSP) recognised during the period as part of employee
benefit expense were $434,007 (2022: $1,321,498).
ACCOUNTING POLICY
Equity settled share based payments are measured at the fair value of the equity instrument at the date of grant. The fair value
of performance rights granted is recognised as an employee benefit expense with a corresponding increase in equity. The
determination of fair value includes consideration of any market performance conditions and the impact of any non-vesting
conditions but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of performance rights that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are
to be satisfied. At the end of each period, the entity revises its estimates of the number of performance rights that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit
and loss, with a corresponding adjustment to equity.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 56 of 97
55 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D2: Share based payments continued
Notes to the Consolidated Financial Statements
Assumption
Fair value
Expiry date
Share price at Grant date
Term (years)
Expected dividend yield
Risk free interest rate
Grant date
14 September 2021
1 January 2022
$7.54
$8.62
24 July 2024
24 July 2024
$12.45
3.0
1.91%
0.11%
$13.37
3.0
1.91%
0.78%
OWNERSHIP SHARE PLAN – PERFORMANCE RIGHTS
During FY23, the Group established an Ownership Share Plan (OSP) designed to maintain and enhance a performance centred
environment for eligible Restaurant General Managers (RGMs), Area Coaches (ACs) and Restaurant Support Centre (RSC)
employees. The OSP aims to reflect current market conditions and to ensure remuneration practices remain competitive. Under
the plan, participants are granted performance rights over shares. The number of performance rights is calculated by dividing
the dollar value of the employee’s grant by the ASX volume weighted average price of the shares for the five trading days prior
and five days after the release of the audited financial results. Each annual grant spans a five year period and will vest in 5
separate tranches, each with a distinct service period. Employees who are participants of any other Group Share Scheme (e.g.
LTIP) are ineligible to participate in the OSP.
Unless otherwise determined by the Board in its discretion, performance rights are issued for nil consideration. The amount of
performance rights that will vest depends upon the satisfaction of a service condition, with one-fifth (20%) of each employee’s
entitlement vesting annually, providing that employee remains employed by the Group. There are no performance conditions
attached the rights granted under the OSP.
Set out below are summaries of performance rights issued under the OSP:
Performance rights
Balance at the beginning of the reporting period
Vested and exercised
Issued during the reporting period
Lapsed during the reporting period
Balance at the end of the reporting period
2023
–
–
239,535
–
239,535
2022
–
–
–
–
–
FAIR VALUE OF PERFORMANCE RIGHTS ISSUED UNDER THE OSP
•
The assessed fair values of performance rights issued on 27 April 2023 ranged from $7.70 to $8.43. The fair value at grant date
was determined using a discounted cash flow model incorporating the share price at grant date of $8.70, the term of the
right, the expected dividend yield of 3.1% and the risk-free interest rate for the term of the rights ranging from 3.01% to 3.05%.
EXPENSES ARISING FROM SHARE BASED PAYMENT TRANSACTIONS
Total expenses arising from share based payment transactions (LTIP and OSP) recognised during the period as part of employee
benefit expense were $434,007 (2022: $1,321,498).
ACCOUNTING POLICY
Equity settled share based payments are measured at the fair value of the equity instrument at the date of grant. The fair value
of performance rights granted is recognised as an employee benefit expense with a corresponding increase in equity. The
determination of fair value includes consideration of any market performance conditions and the impact of any non-vesting
conditions but excludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of performance rights that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are
to be satisfied. At the end of each period, the entity revises its estimates of the number of performance rights that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit
and loss, with a corresponding adjustment to equity.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 56 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 56
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D3: Contributed equity
EQUITY OF PARENT COMPANY
30 April 2023
1 May 2022
Shares
Share capital
Shares
Share capital
E1: Investments accounted for using the equity method
$000
$000
E2: Related party transactions
Issues of ordinary shares during the financial
year:
Balance at beginning of the period
116,696,110
291,394
116,581,244
290,788
E1: Investments accounted for using the equity method
E: RELATED PARTIES
This section provides information relating to the Group’s related parties and the extent of related party transactions within the
Group and the impact they had on the Group’s financial performance and position.
Acquisition – Share component
Dividend reinvestment plan
Senior executive performance rights plan
284,091
256,807
85,564
3,000
2,246
732
–
–
114,866
–
–
606
Balance at the end of the period
117,322,572
297,372
116,696,110
291,394
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is
entitled to one vote. Upon a poll each share is entitled to one vote. Ordinary shares have no par value and the Company does
not have a limited amount of authorised capital.
ACCOUNTING POLICY
Debt and equity instruments are classified as either liabilities or equity in accordance with the substance of the contractual
arrangement. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from proceeds.
INTERESTS IN INDIVIDUALLY IMMATERIAL JOINT VENTURES
Name of entity
Place of incorporation Acronym
Sizzler China Pte Ltd
Singapore
SCP
Summarised financial information of joint ventures
% of ownership interest
2023
%
50
2023
(1) $000
–
(5)
(5)
2022
%
50
2022
$000
2,497
(5)
(5)
Aggregate carrying amount of individually immaterial joint ventures
Aggregate amounts of the Group's share of:
Loss from operations
Total comprehensive income
ACCOUNTING POLICY
(1) The Sizzler China Pte Ltd Joint Venture is held by the Sizzler Asia business. This has been classified as held for sale as at 30 April 2023. Refer to Note F.
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint
arrangement. The Group has one joint venture. Investments in joint ventures are accounted for using the equity method of
accounting, after initially being recognised at cost in the Consolidated Balance Sheet.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise
the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in
other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from joint
ventures are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity accounted investment equals or exceeds its interest in the entity, including any
other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in
the entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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57 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
E: RELATED PARTIES
This section provides information relating to the Group’s related parties and the extent of related party transactions within the
Group and the impact they had on the Group’s financial performance and position.
E1: Investments accounted for using the equity method
E2: Related party transactions
E1: Investments accounted for using the equity method
INTERESTS IN INDIVIDUALLY IMMATERIAL JOINT VENTURES
Name of entity
Place of incorporation Acronym
Sizzler China Pte Ltd
Singapore
SCP
Summarised financial information of joint ventures
Aggregate carrying amount of individually immaterial joint ventures
Aggregate amounts of the Group's share of:
Loss from operations
Total comprehensive income
% of ownership interest
2023
%
50
2023
(1) $000
–
(5)
(5)
2022
%
50
2022
$000
2,497
(5)
(5)
(1) The Sizzler China Pte Ltd Joint Venture is held by the Sizzler Asia business. This has been classified as held for sale as at 30 April 2023. Refer to Note F.
ACCOUNTING POLICY
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures.
The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint
arrangement. The Group has one joint venture. Investments in joint ventures are accounted for using the equity method of
accounting, after initially being recognised at cost in the Consolidated Balance Sheet.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise
the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in
other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from joint
ventures are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity accounted investment equals or exceeds its interest in the entity, including any
other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in
the entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 58 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 58
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
E2: Related party transactions
PARENT ENTITY
The parent entity and ultimate parent entity within the Group is Collins Foods Limited.
KEY MANAGEMENT PERSONNEL
F: DISCONTINUED OPERATION
F: Description
F1(a): Financial performance and cash flow information
F1(b): Assets and liabilities of disposal group classified as held for sale
Disclosures relating to the compensation of KMP are included in Note D1 and in the Remuneration Report included in the
Directors' Report.
F: Description
SUBSIDIARIES
The ownership interests in subsidiaries are set out in Note H1. Transactions between entities within the Group during the reporting
period consisted of loans advanced and repaid, interest charged and received, operating expenses paid, non-current assets
purchased and sold, and tax losses transferred. These transactions were undertaken on commercial terms and conditions.
OUTSTANDING BALANCES ARISING FROM SALES AND PURCHASES OF GOODS AND SERVICES
There were no outstanding balances (2022: nil) with related parties at the end of the reporting period.
TRANSACTIONS WITH RELATED PARTIES
There were no transactions with related parties during the reporting period ending 30 April 2023.
Any outstanding balances other than loans to key management personnel are unsecured and are repayable in cash. There
were no outstanding balances from other transactions (2022: nil) with related parties at the end of the reporting period.
On 30 April 2023, the Group signed a Letter of Intent to sell the 100% owned SingCo Trading Pte. Ltd Group (SingCo) for SGD20.2
million. The associated SingCo assets and liabilities are consequently presented as available for sale and is reported as a
discontinued operation as SingCo represents an identifiable, single geographical area of operations.
F1(a): Financial performance and cash flow information
The financial performance and cash flow information presented are for the period ended 30 April 2023 and 1 May 2022.
Profit from discontinued operations before finance income, finance costs and
(2,123)
(1,693)
Revenue
Cost of Sales
Gross profit
Other Expenses
Administration expenses
income tax (EBIT)
Finance costs
Profit before Income tax
Income tax expense
Profit from discontinued operations
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
Net increase / (decrease) in cash generated by the discontinued operations
2023
$000
4,113
–
4,113
(13)
1,977
–
1,977
(509)
1,468
2023
$000
2,188
–
–
2,188
2022
$000
2,822
–
2,822
(43)
1,086
–
1,086
(364)
722
2022
$000
1,073
–
(8,760)
(7,687)
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 59 of 97
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 60 of 97
59 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F: DISCONTINUED OPERATION
F: Description
F1(a): Financial performance and cash flow information
F1(b): Assets and liabilities of disposal group classified as held for sale
F: Description
On 30 April 2023, the Group signed a Letter of Intent to sell the 100% owned SingCo Trading Pte. Ltd Group (SingCo) for SGD20.2
million. The associated SingCo assets and liabilities are consequently presented as available for sale and is reported as a
discontinued operation as SingCo represents an identifiable, single geographical area of operations.
F1(a): Financial performance and cash flow information
The financial performance and cash flow information presented are for the period ended 30 April 2023 and 1 May 2022.
Revenue
Cost of Sales
Gross profit
Other Expenses
Administration expenses
Profit from discontinued operations before finance income, finance costs and
income tax (EBIT)
Finance costs
Profit before Income tax
Income tax expense
Profit from discontinued operations
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
Net increase / (decrease) in cash generated by the discontinued operations
2023
$000
4,113
–
4,113
(13)
2022
$000
2,822
–
2,822
(43)
(2,123)
(1,693)
1,977
–
1,977
(509)
1,468
2023
$000
2,188
–
–
2,188
1,086
–
1,086
(364)
722
2022
$000
1,073
–
(8,760)
(7,687)
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 60 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 60
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F1(b): Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operations at 30 April 2023.
G: OTHER ITEMS
Assets classified as held for sale
Receivables
Other assets
Intangible assets (1)
Investments accounted for using the equity method
Total assets of disposal group
Liabilities directly associated with assets classified as held for sale
Trade and other payables
Deferred tax liabilities
Total liabilities of disposal group held for sale
(1)
Includes recognised Goodwill of $1,405,000.
ACCOUNTING POLICY
G1: Commitments for expenditure
G8: Leases
G2: Other gains/(losses) - net
G9: Trade and other payables
G3: Earnings per share
G4: Receivables
G5: Property, plant and equipment
G6: Intangible assets
G7: Impairment of assets
G10: Provisions
G11: Reserves
G12: Tax
G13: Auditor’s Remuneration
G14: Contingencies
2023
$000
334
113
9,402
2,393
12,242
672
1,360
2,032
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at
the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to
sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in
excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale
of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue
to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented
separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose
of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the statement of profit or loss.
(1) This represents any agreements for leases the Group has signed before year end, that have not yet proceeded to an executed lease agreement. This is the value
repayable over the primary term of the lease. As there is not yet a commencement date, the values have not been discounted to present value.
G1: Commitments for expenditure
CAPITAL COMMITMENTS
Right-of-use assets (1)
Property, plant and equipment
Land and buildings
Total commitments
G2: Other gains/(losses) – net
Net foreign exchange gain / (loss)
Net loss on disposal of property, plant and equipment
Net gain / (loss) on disposal of leases
Gain on sale and leaseback
Fair value loss on debt modification
Other gains / (losses) – net
G3: Earnings per share
2023
$000
24,843
3,234
5,042
33,119
2023
$000
(126)
(33)
(891)
–
–
(1,050)
2023
$000
11,278
1,468
Shares
2022
$000
31,134
8,541
5,125
44,800
2022
$000
613
(217)
2,684
1,238
(945)
3,373
(1) 2022
$000
54,077
722
Shares
Earnings used in the calculation of basic and diluted earnings per share from continuing
operations
Net profit from discontinued operation
Weighted average basic ordinary shares outstanding
Weighted average diluted ordinary shares outstanding
Basic earnings per share
Basic earnings per share from continuing operations
Basic earnings per share from discontinued operations
Total basic earnings per share attributable to members of Collins Foods Limited
117,177,086
116,696,110
117,904,019
117,223,628
Cents
Cents
9.62
1.25
10.87
46.34
0.62
46.96
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61 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G: OTHER ITEMS
G1: Commitments for expenditure
G8: Leases
G2: Other gains/(losses) - net
G9: Trade and other payables
G3: Earnings per share
G4: Receivables
G5: Property, plant and equipment
G6: Intangible assets
G7: Impairment of assets
G10: Provisions
G11: Reserves
G12: Tax
G13: Auditor’s Remuneration
G14: Contingencies
G1: Commitments for expenditure
CAPITAL COMMITMENTS
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Right-of-use assets (1)
Property, plant and equipment
Land and buildings
Total commitments
2023
$000
24,843
3,234
5,042
33,119
2022
$000
31,134
8,541
5,125
44,800
(1) This represents any agreements for leases the Group has signed before year end, that have not yet proceeded to an executed lease agreement. This is the value
repayable over the primary term of the lease. As there is not yet a commencement date, the values have not been discounted to present value.
G2: Other gains/(losses) – net
Net foreign exchange gain / (loss)
Net loss on disposal of property, plant and equipment
Net gain / (loss) on disposal of leases
Gain on sale and leaseback
Fair value loss on debt modification
Other gains / (losses) – net
G3: Earnings per share
Earnings used in the calculation of basic and diluted earnings per share from continuing
operations
Net profit from discontinued operation
Weighted average basic ordinary shares outstanding
Weighted average diluted ordinary shares outstanding
Basic earnings per share
Basic earnings per share from continuing operations
Basic earnings per share from discontinued operations
Total basic earnings per share attributable to members of Collins Foods Limited
2023
$000
(126)
(33)
(891)
–
–
(1,050)
2023
$000
11,278
1,468
Shares
2022
$000
613
(217)
2,684
1,238
(945)
3,373
(1) 2022
$000
54,077
722
Shares
117,177,086
116,696,110
117,904,019
117,223,628
Cents
Cents
9.62
1.25
10.87
46.34
0.62
46.96
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 62
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G3: Earnings per share continued
G5: Property, plant and equipment
Diluted earnings per share
Diluted earnings per share from continuing operations
Diluted earnings per share from discontinued operations
Total diluted earnings per share attributable to members of Collins Foods Limited
(1) Comparative figures have been restated to present the impacts of the current period discontinued operations (as outlined in Note F)
2023
Cents
9.57
1.25
10.82
(1) 2022
Cents
46.13
0.62
46.75
Land &
Leasehold
Plant and
Construction
Buildings
improvements
equipment
in progress
$000
$000
$000
$000
Total
$000
Accumulated depreciation & impairments
(177,018)
(119,423)
–
(297,679)
Net book amount at 2 May 2022
116,718
63,184
15,234
216,099
293,736
182,607
15,234
513,778
Weighted average number of shares used as the denominator
Acquisitions through controlled entity purchased
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share:
Performance rights
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
2023
Shares
2022
Shares
117,177,086
116,696,110
726,933
527,518
117,904,019
117,223,628
ACCOUNTING POLICY
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average
number of ordinary shares outstanding during the financial period. Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential ordinary shares.
G4: Receivables
CURRENT ASSETS – RECEIVABLES
Trade receivables
2023
$000
(1) 20,099
20,099
2022
$000
4,200
4,200
(1)
Includes $13.3 million receivable in relation to the deposit paid for the acquisition from R. Sambo Holdings B.V. (refer Note J1).
ACCOUNTING POLICY
Trade receivables are amounts due for goods or services performed in the ordinary course of business. They are generally due
for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially at the amount
of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair
value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures
them subsequently at amortised cost using the effective interest method.
Impairment of trade receivables
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on
shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of receivables over a period of 36 months before 30 April 2023 or
1 May 2022 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to
settle the receivables. The Group has identified the GDP and the unemployment rate of the countries in which it sells its goods
and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in
these factors.
At 2 May 2022
Cost
Additions
Transfers
Depreciation charge
Impairment charge (1)
Disposals
Exchange differences
At 30 April 2023
Cost
At 3 May 2021
Cost
Additions
Transfers
Depreciation charge
Impairment charge (1)
Disposals
Exchange differences
At 1 May 2022
Cost
Net book amount at 30 April 2023
24,931
118,622
Accumulated depreciation & impairments
(215,802)
(149,777)
–
(367,287)
Net book amount at 30 April 2023
Accumulated depreciation & impairments
(158,055)
(103,993)
–
(263,016)
Net book amount at 3 May 2021
106,578
59,552
9,983
188,919
Acquisitions through controlled entity purchased
34,370
(70,895)
2,621
132
32,396
(23,544)
(13,222)
(60)
3,581
286
134
(21,170)
(8,312)
(32)
1,819
70,279
67,299
70,206
–
–
–
266
310
(45,185)
(21,534)
(1,149)
(1,241)
199
5,599
10,688
224,520
334,424
220,056
10,688
591,807
118,622
$000
70,279
$000
10,688
224,520
$000
$000
264,633
163,545
9,983
451,935
20,868
(59,374)
(22,900)
(20,239)
2,265
2,530
(555)
(385)
(852)
65,105
69,320
152
–
–
(350)
(282)
8,721
(638)
(43,500)
(1,523)
(2,466)
(2,734)
1,950
6,039
27,868
(968)
(249)
(1,600)
116,718
293,736
182,607
15,234
513,778
Net book amount at 1 May 2022
63,184
15,234
216,099
Accumulated depreciation & impairments
(177,018)
(119,423)
–
(297,679)
Net book amount at 1 May 2022
116,718
63,184
15,234
216,099
(1)
Included in Note G7 is the breakdown of impairments.
ACCOUNTING POLICY
All property, plant and equipment is recorded at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably.
22,201
(1,238)
20,963
4,439
(471)
–
–
–
–
–
26,639
(1,708)
24,931
$000
13,774
(968)
12,806
–
–
–
–
10,000
(361)
(1,482)
20,963
22,201
(1,238)
20,963
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63 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G5: Property, plant and equipment
Land &
Buildings
Leasehold
improvements
Plant and
equipment
Construction
in progress
$000
$000
$000
$000
Total
$000
At 2 May 2022
Cost
Accumulated depreciation & impairments
Net book amount at 2 May 2022
Additions
Acquisitions through controlled entity purchased
Transfers
Depreciation charge
Impairment charge (1)
Disposals
Exchange differences
22,201
(1,238)
20,963
–
–
4,439
(471)
–
–
–
293,736
182,607
15,234
513,778
(177,018)
(119,423)
–
(297,679)
116,718
63,184
15,234
216,099
2,621
132
32,396
(23,544)
(13,222)
(60)
3,581
286
134
67,299
70,206
–
266
310
34,370
(70,895)
(21,170)
(8,312)
(32)
1,819
70,279
–
–
(45,185)
(21,534)
(1,149)
(1,241)
199
5,599
10,688
224,520
Net book amount at 30 April 2023
24,931
118,622
At 30 April 2023
Cost
Accumulated depreciation & impairments
Net book amount at 30 April 2023
At 3 May 2021
Cost
Accumulated depreciation & impairments
Net book amount at 3 May 2021
Additions
Acquisitions through controlled entity purchased
Transfers
Depreciation charge
Impairment charge (1)
Disposals
Exchange differences
Net book amount at 1 May 2022
At 1 May 2022
Cost
Accumulated depreciation & impairments
Net book amount at 1 May 2022
(1)
Included in Note G7 is the breakdown of impairments.
ACCOUNTING POLICY
26,639
(1,708)
24,931
$000
13,774
(968)
12,806
–
–
10,000
(361)
–
(1,482)
–
20,963
22,201
(1,238)
20,963
334,424
220,056
10,688
591,807
(215,802)
(149,777)
–
(367,287)
118,622
$000
70,279
$000
10,688
224,520
$000
$000
264,633
163,545
9,983
451,935
(158,055)
(103,993)
–
(263,016)
106,578
59,552
9,983
188,919
20,868
(59,374)
(22,900)
(20,239)
1,950
6,039
27,868
(968)
(249)
(1,600)
116,718
2,265
2,530
(555)
(385)
(852)
65,105
69,320
152
–
–
(350)
(282)
8,721
(638)
(43,500)
(1,523)
(2,466)
(2,734)
63,184
15,234
216,099
293,736
182,607
15,234
513,778
(177,018)
(119,423)
–
(297,679)
116,718
63,184
15,234
216,099
All property, plant and equipment is recorded at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 64
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G5: Property, plant and equipment continued
Property, plant and equipment, excluding freehold land, is depreciated at rates based upon the expected useful economic life
as follows:
Asset classes
Buildings
Leasehold improvements:
Buildings
Other leasehold improvements
Plant and equipment
Motor vehicles
Method
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Average Life
20 years
20 years or term of the lease (1)
Primary term of lease (2)
8 years
4 years
(1) Estimated useful life is the shorter of 20 years or the full term of the lease including renewal periods that are intended to be exercised.
(2)
If primary term of the lease differs significantly from the estimated useful life of the asset, judgement is applied to the estimated useful life and an individual rate is
applied.
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
The Group reviews annually whether the triggers indicating a risk of impairment exist. The recoverable amounts of cash
generating units have been determined based on value-in-use calculations. These calculations require the use of estimates
(refer Note G7).
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
The gain or loss on disposal of all non-current assets is determined as the difference between the carrying amount of the asset
at the time of disposal and the proceeds on disposal and is included in the Consolidated Income Statement of the Group in the
reporting period of disposal.
G6: Intangible assets
Goodwill
Franchise
rights
$000
$000
Brand
names
$000
Software
Other
Total
$000
$000
$000
At 2 May 2022
Cost
Accumulated amortisation & impairments
Net book amount at 2 May 2022
Additions
Acquisitions through controlled entity
purchased
Transfers
Amortisation charge
Impairment charge (1)
Transfers to assets held for sale (2)
Exchange differences
478,093
(28,070)
450,023
–
7,317
–
–
–
(1,405)
15,127
21,154
(9,389)
11,765
2,552
–
–
(1,386)
(1,034)
–
203
Net book amount at 30 April 2023
471,062
12,100
31,105
(22,793)
8,312
–
–
–
(950)
–
(7,997)
635
–
13,142
(7,950)
5,192
586
9
(310)
(1,678)
(26)
–
133
–
–
–
5,302
–
–
(78)
–
–
-
543,494
(68,202)
475,292
8,440
7,326
(310)
(4,092)
(1,060)
(9,402)
16,098
3,906
5,224
492,292
At 30 April 2023
Cost
499,132
33,638
11,261
13,937
5,302
563,270
Goodwill
Franchise
Software
Total
rights
$000
19,577
(8,220)
11,357
1,753
–
–
(1,094)
(31)
(220)
11,765
21,154
(9,389)
11,765
Brand
names
$000
29,648
(21,183)
8,465
–
–
–
–
725
8,312
$000
$000
9,844
(5,510)
4,334
2,696
152
638
514,532
(62,983)
451,549
4,449
30,583
638
–
(36)
(31)
(7,332)
5,192
475,292
(878)
(2,592)
(4,564)
31,105
(22,793)
13,142
(7,950)
543,494
(68,202)
8,312
5,192
475,292
$000
455,463
(28,070)
427,393
–
–
–
–
(7,801)
450,023
478,093
(28,070)
450,023
Acquisitions through controlled entity purchased
30,431
G6: Intangible assets continued
Accumulated amortisation & impairments
Net book amount at 3 May 2021
At 3 May 2021
Cost
Additions
Transfers
Amortisation charge
Impairment charge (1)
Exchange differences
Net book amount at 1 May 2022
At 1 May 2022
Cost
Accumulated amortisation & impairments
Net book amount at 1 May 2022
(1)
Included in Note G7 is the breakdown of impairments.
G7: Impairment of assets
IMPAIRMENT OF ASSETS
IMPAIRMENT TEST FOR GOODWILL
Allocation of goodwill
KFC Restaurants Australia
KFC Restaurants Europe
Sizzler Asia (1)
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised in the Consolidated Income Statement for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units). If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the
reversal of the previously recognised impairment loss is recognised in the Consolidated Income Statement.
Carrying value
2022
$000
327,005
121,716
1,302
450,023
2023
$000
334,323
136,739
–
471,062
Accumulated amortisation & impairments
(28,070)
(21,538)
(11,261)
(10,031)
(78)
(70,978)
(1) Goodwill in Sizzler Asia has been classified as held for sale at 30 April 2023. Refer to Note F2.
Net book amount at 30 April 2023
471,062
12,100
–
3,906
5,224
492,292
(1)
Included in Note G7 is the breakdown of impairments.
(2) Relates to the intangible assets of the Sizzler Asia business which was classified as held for sale at 30 April 2023. Refer to Note F.
Goodwill is tested for impairment at a cash generating unit level. The recoverable amount of a cash generating unit is
determined based on value-in-use calculations. Management recognises that there are various reasons that the estimates used
in the assumptions may vary. For the KFC Restaurants Australia and KFC Restaurants Europe cash generating units, there are no
reasonable and likely changes in assumptions which would result in an impairment to goodwill.
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65 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
Brand
names
$000
29,648
(21,183)
8,465
–
–
–
Software
Total
$000
$000
9,844
(5,510)
4,334
2,696
152
638
514,532
(62,983)
451,549
4,449
30,583
638
19,577
(8,220)
11,357
1,753
–
–
(1,094)
(878)
(2,592)
(4,564)
(31)
(220)
–
725
–
(36)
(31)
(7,332)
11,765
8,312
5,192
475,292
21,154
(9,389)
11,765
31,105
(22,793)
13,142
(7,950)
543,494
(68,202)
8,312
5,192
475,292
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G6: Intangible assets continued
Goodwill
Franchise
rights
$000
$000
At 3 May 2021
Cost
Accumulated amortisation & impairments
Net book amount at 3 May 2021
Additions
Acquisitions through controlled entity purchased
Transfers
Amortisation charge
Impairment charge (1)
Exchange differences
Net book amount at 1 May 2022
At 1 May 2022
Cost
Accumulated amortisation & impairments
Net book amount at 1 May 2022
(1)
Included in Note G7 is the breakdown of impairments.
G7: Impairment of assets
IMPAIRMENT OF ASSETS
455,463
(28,070)
427,393
–
30,431
–
–
–
(7,801)
450,023
478,093
(28,070)
450,023
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised in the Consolidated Income Statement for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units). If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the
reversal of the previously recognised impairment loss is recognised in the Consolidated Income Statement.
IMPAIRMENT TEST FOR GOODWILL
Allocation of goodwill
KFC Restaurants Australia
KFC Restaurants Europe
Sizzler Asia (1)
Carrying value
2022
$000
327,005
121,716
1,302
450,023
2023
$000
334,323
136,739
–
471,062
(1) Goodwill in Sizzler Asia has been classified as held for sale at 30 April 2023. Refer to Note F2.
Goodwill is tested for impairment at a cash generating unit level. The recoverable amount of a cash generating unit is
determined based on value-in-use calculations. Management recognises that there are various reasons that the estimates used
in the assumptions may vary. For the KFC Restaurants Australia and KFC Restaurants Europe cash generating units, there are no
reasonable and likely changes in assumptions which would result in an impairment to goodwill.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 66
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G7: Impairment of assets continued
During the reporting period ended 30 April 2023, the above cash generating units and the individual restaurant assets (including
Taco Bell restaurants) were tested for impairment in accordance with AASB 136 Impairment of Assets. In the event that the
carrying value of these assets was higher than the recoverable amount (measured as the higher of fair value less costs to sell
and value in use) an impairment charge was recognised in the Consolidated Income Statement as set out in the table below.
KFC Australia
restaurants
2023
$000
2022
$000
–
–
–
–
–
–
–
–
–
–
–
–
KFC Europe
restaurants
Taco Bell
restaurants
2023
$000
948
363
–
–
3,281
4,592
2022
$000
–
–
–
–
–
–
2023
$000
12,274
7,949
1,034
26
27,771
49,054
2022
$000
968
555
31
–
1,609
3,163
2023
$000
13,222
8,312
1,034
26
31,052
53,646
Total
2022
$000
968
555
31
–
1,609
3,163
Leasehold improvements
Plant and equipment
Franchise rights
Software
Right-of-use assets
Total
KEY ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS
Post-tax discount rate segment
Post-tax discount rate restaurant
Growth rates:
Revenue for Yr 1 - Yr 5 (1)
Revenue for Yr 6 - Yr 20
Annual growth for terminal value
KFC Australia
KFC Europe
2023
7.4%
2022
7.4%
2023
7.4%
2022
7.4%
2023
(2) N/A
Taco Bell
2022
(2) N/A
Restaurant
specific
Restaurant
specific
Restaurant
specific
Restaurant
specific
Restaurant
specific
Restaurant
specific
* 4.6%
2.5%
2.5%
* 5.0%
2.5%
2.5%
* 3.8%
1.5%
1.5%
* 4.1%
* 1.2%
* 12.0%
1.5%
1.5%
2.5%
2.5%
2.5%
2.5%
(1) The Revenue Growth rates applied from Yr 1 – Yr 5 relate specifically to restaurant assets where detailed impairment models were prepared.
(2) Only individual restaurant assets were tested for impairment in the Taco Bell cash generating unit.
*
Restaurant specific plans with average annual growth rate.
KFC Australia restaurants
Value in use recoverable amount valuations were performed at the cash generating unit level and at the individual restaurant
level for the purpose of testing goodwill and restaurant specific assets, respectively. Restaurant assets include Property, Plant &
Equipment and Right-of-use assets. Detailed impairment models were prepared for the cash generating unit and for some of
the KFC Australia restaurants where indicators of impairment were identified. The impairment test did not result in any
impairments for the KFC Australia restaurants.
The impairment models have been prepared as follows:
•
•
The cash flow estimate for the cash generating unit has been prepared based on a period of five years.
The annual growth rates applied in the first five years average 4.6% (2022: 5.0%) for the stores modelled. The year one
projections have been aligned to the division's specific cash flows reflected in the 2024 budget.
• Annual growth rates of 2.5% (2022: 2.5%) have been applied from year 6 onwards, which does not exceed the long-term
average growth rate for the industry segment in which the restaurants operate.
Management believe that these growth percentages are reasonable considering the growth that has been seen in this
operating segment during 2023, prior to COVID-19, in prior reporting periods, and in the weeks since year-end.
• Cost of sales percentage is estimated to remain reasonably consistent over the cash flow period. Cost of labour percentage
is estimated to steadily decrease with the increase in sales volume.
• A post-tax discount rate of 7.4% has been calculated for the KFC Australia segment (2022: 7.4% post tax). The change in the
post-tax discount rate applied to certain restaurant assets is the result of the discount rates applied to each individual
restaurant being adjusted by the incremental borrowing rate (IBR) applied to each AASB 16 lease. This has resulted in post-
tax discount rates in the range 6.3 – 8.5% for the individual restaurants assessed for impairment (2022: range 5.0 – 8.5%).
G7: Impairment of assets continued
SIGNIFICANT ESTIMATE: IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS
Management recognises that a change in one of the assumptions applied to the discount rates or growth rates could result in
the impairment of some of the Group’s KFC Australia restaurant assets.
However, management has considered the likelihood of these possible changes and believe that strong revenue growth
achieved in the operating segment historically, during the current financial year and in the weeks since year-end, supports the
growth percentages applied in the cash flows and that the discount rates applied are appropriate having assessed against
current market factors.
Management do not consider that a reasonable possible change in any of the key assumptions would cause their carrying
amounts to significantly exceed their recoverable amounts.
KFC Europe restaurants
Value in use recoverable amount valuations were performed at the cash generating unit level and at the individual restaurant
level for the purpose of testing goodwill and restaurant specific assets, respectively. Restaurant assets include Property, Plant &
Equipment and Right-of-use assets. Detailed impairment models were prepared for the cash generating unit and for some of
the KFC Europe restaurants where indicators of impairment were identified. The impairment resulted in the impairment of one
KFC Europe restaurant.
Impairment charges of $5.0 million were recognised in respect of KFC Europe restaurants, comprising $3.3 million of Right-of-use
assets, $0.9 million of leasehold improvements and $0.4 million of plant and equipment. The impairment charge principally
relates to the full impairment of one restaurant.
The impairment models have been prepared as follows:
•
•
The cash flow estimate for the cash generating unit has been prepared based on a period of five years.
The year one projections have been aligned to the division's specific cash flows reflected in the 2024 budget. The annual
growth rates applied in the first 5 years average 3.8% (2022: 4.1%) The year one projections have been aligned to the
division's specific cash flows reflected in the 2024 budget.
• Cost of sales percentage is estimated to remain consistent over the cash flow period.
• Annual growth rates of 1.5% have been applied from year 6 onwards (2022: 1.5%) which does not exceed the long-term
average growth rate for the industry segment in which the restaurants operate.
Management believe that these growth percentages are reasonable considering the growth that has been seen in this
operating segment during 2023, prior to COVID-19, in prior reporting periods, and in the weeks since year-end.
• A post-tax discount rate of 7.4% has been calculated for the KFC Europe segment (2022: 7.4% post tax). The change in the
post-tax discount rate applied to certain restaurant assets is the result of the discount rates applied to each individual
restaurant being adjusted by the IBR applied to each AASB 16 lease. This has resulted in post-tax discount rates in the range
of 5.5 - 7.5% for the individual restaurants assessed for impairment (2022: range 5.5 – 7.8%).
SIGNIFICANT ESTIMATE: IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS
Management recognises that a change in one of the assumptions applied to the discount rates or growth rates could result in
the impairment of some of the Group’s KFC Europe restaurant assets.
However, management has considered the likelihood of these possible changes and believe that strong revenue growth
achieved in the operating segment historically and during FY23 supports the growth percentages applied in the cash flows and
that the discount rate applied are appropriate having assessed against current market factors.
Management do not consider that a reasonable possible change in any of the key assumptions would cause their carrying
amounts to significantly exceed their recoverable amounts.
Taco Bell
Value in use recoverable amount valuations were not performed at the Taco Bell segment level as there is no goodwill or other
indefinite life intangible assets for Taco Bell. However, each of the individual restaurants represents a cash generating unit for the
purpose of testing Property, Plant & Equipment, Right-of-use assets and other restaurant specific assets. Accordingly, impairment
models were prepared for all Taco Bell restaurants where indicators of impairment were identified.
Management identified indicators of impairment amongst the Taco Bell restaurants network due to their financial performance
compared to the individual restaurant forecasts. Detailed impairment models were prepared, resulting in the impairment of
$20.2 million of Property, plant and equipment, $27.8 million of Right-of-use assets and $1.1 million of Franchise rights.
• As stated in the interim financial statements to 16 October 2022, the revenue growth and EBITDA rates for Years 1 - 5 are the
most significant assumptions underpinning the Taco Bell impairment analysis.
• During the second half of the financial reporting period ending 30 April 2023, the performance of the Taco Bell business unit
was below expectations.
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67 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G7: Impairment of assets continued
SIGNIFICANT ESTIMATE: IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS
Management recognises that a change in one of the assumptions applied to the discount rates or growth rates could result in
the impairment of some of the Group’s KFC Australia restaurant assets.
However, management has considered the likelihood of these possible changes and believe that strong revenue growth
achieved in the operating segment historically, during the current financial year and in the weeks since year-end, supports the
growth percentages applied in the cash flows and that the discount rates applied are appropriate having assessed against
current market factors.
Management do not consider that a reasonable possible change in any of the key assumptions would cause their carrying
amounts to significantly exceed their recoverable amounts.
KFC Europe restaurants
Value in use recoverable amount valuations were performed at the cash generating unit level and at the individual restaurant
level for the purpose of testing goodwill and restaurant specific assets, respectively. Restaurant assets include Property, Plant &
Equipment and Right-of-use assets. Detailed impairment models were prepared for the cash generating unit and for some of
the KFC Europe restaurants where indicators of impairment were identified. The impairment resulted in the impairment of one
KFC Europe restaurant.
Impairment charges of $5.0 million were recognised in respect of KFC Europe restaurants, comprising $3.3 million of Right-of-use
assets, $0.9 million of leasehold improvements and $0.4 million of plant and equipment. The impairment charge principally
relates to the full impairment of one restaurant.
The impairment models have been prepared as follows:
•
•
The cash flow estimate for the cash generating unit has been prepared based on a period of five years.
The year one projections have been aligned to the division's specific cash flows reflected in the 2024 budget. The annual
growth rates applied in the first 5 years average 3.8% (2022: 4.1%) The year one projections have been aligned to the
division's specific cash flows reflected in the 2024 budget.
• Cost of sales percentage is estimated to remain consistent over the cash flow period.
• Annual growth rates of 1.5% have been applied from year 6 onwards (2022: 1.5%) which does not exceed the long-term
average growth rate for the industry segment in which the restaurants operate.
Management believe that these growth percentages are reasonable considering the growth that has been seen in this
operating segment during 2023, prior to COVID-19, in prior reporting periods, and in the weeks since year-end.
• A post-tax discount rate of 7.4% has been calculated for the KFC Europe segment (2022: 7.4% post tax). The change in the
post-tax discount rate applied to certain restaurant assets is the result of the discount rates applied to each individual
restaurant being adjusted by the IBR applied to each AASB 16 lease. This has resulted in post-tax discount rates in the range
of 5.5 - 7.5% for the individual restaurants assessed for impairment (2022: range 5.5 – 7.8%).
SIGNIFICANT ESTIMATE: IMPACT OF POSSIBLE CHANGES IN KEY ASSUMPTIONS
Management recognises that a change in one of the assumptions applied to the discount rates or growth rates could result in
the impairment of some of the Group’s KFC Europe restaurant assets.
However, management has considered the likelihood of these possible changes and believe that strong revenue growth
achieved in the operating segment historically and during FY23 supports the growth percentages applied in the cash flows and
that the discount rate applied are appropriate having assessed against current market factors.
Management do not consider that a reasonable possible change in any of the key assumptions would cause their carrying
amounts to significantly exceed their recoverable amounts.
Taco Bell
Value in use recoverable amount valuations were not performed at the Taco Bell segment level as there is no goodwill or other
indefinite life intangible assets for Taco Bell. However, each of the individual restaurants represents a cash generating unit for the
purpose of testing Property, Plant & Equipment, Right-of-use assets and other restaurant specific assets. Accordingly, impairment
models were prepared for all Taco Bell restaurants where indicators of impairment were identified.
Management identified indicators of impairment amongst the Taco Bell restaurants network due to their financial performance
compared to the individual restaurant forecasts. Detailed impairment models were prepared, resulting in the impairment of
$20.2 million of Property, plant and equipment, $27.8 million of Right-of-use assets and $1.1 million of Franchise rights.
• As stated in the interim financial statements to 16 October 2022, the revenue growth and EBITDA rates for Years 1 - 5 are the
most significant assumptions underpinning the Taco Bell impairment analysis.
• During the second half of the financial reporting period ending 30 April 2023, the performance of the Taco Bell business unit
was below expectations.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 68
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G7: Impairment of assets continued
G8: Leases continued
• Further business improvement initiatives are underway, however, as at the Balance Sheet date, management has reduced
its revenue growth and EBITDA assumptions for future years. This has had the effect of additional restaurant impairments
across the Group’s Taco Bell portfolio.
AMOUNTS RECOGNISED IN THE INCOME STATEMENT
The income statement shows the following amounts relating to leases:
•
•
The total charge for the financial period to 30 April 2023 has been $49.1 million.
The remaining net book value of the Taco Bell restaurants on 30 April 2023, after the recognition of the $49.1 million
impairment charge, is nil for all stores. One remaining restaurant is due to open in July 2023 where an onerous lease
provision for $1.9m has been taken up due to the revised outlook for this store based on the experience from other store
openings.
ACCOUNTING POLICY
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary at the date of acquisition. Goodwill is not amortised. Instead, goodwill is tested for impairment
annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less
accumulated impairment losses. Goodwill is allocated to cash generating units for the purpose of impairment testing.
The Group determines whether goodwill with indefinite useful lives are impaired at least on an annual basis. This requires an
estimation of the recoverable amount of the cash generating units to which the goodwill with indefinite useful lives relate.
Franchise rights
Costs associated with franchise licences which provide a benefit for more than one reporting period are amortised over the
remaining term of the franchise licence. Capitalised costs associated with renewal options for franchise licences are deferred
and amortised over the renewal option period. The unamortised balance is reviewed each balance date and charged to the
Consolidated Income Statement to the extent that future benefits are no longer probable.
Software
Software consists of both externally acquired software programmes and capitalised development costs of internally generated
software. The Group amortises software using a straight-line method over 3-8 years. Costs associated with maintaining software
programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and
testing of identifiable and unique software products controlled by the Group are recognised as intangible assets where the
criteria within AASB 138 Intangible Assets is met. Directly attributable costs that are capitalised as part of the software include
employee costs, installation costs and associated expenditure. Capitalised development costs are recorded as intangible assets
and amortised from the point at which the asset is ready for use.
G8: Leases
This note provides information for leases where the Group is a lessee.
AMOUNTS RECOGNISED IN THE BALANCE SHEET
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Property
Motor vehicles
Lease liabilities
Current
Non-current
2023
$000
463,420
2,398
465,818
44,639
506,872
551,511
2022
$000
430,162
2,306
432,468
37,766
439,623
477,389
Additions to the right-of-use assets during the 2023 financial period were $56,348,030 (2022: $98,199,000).
Depreciation charge of right-of-use assets
Property
Motor vehicles
Impairment charge of right-of-use assets
Properties
2023
$000
47,685
1,192
48,877
31,052
31,052
2023
$000
–
2022
$000
44,008
1,023
45,031
1,609
1,609
2022
$000
1,238
Gain on sale and leaseback
Interest expense (included in finance costs)
and administrative expenses)
occupancy expenses)
Expense relating to short-term leases (included in selling marketing and royalty, occupancy,
Expense relating to variable lease payments not included in lease liabilities (included in
25,376
22,679
778
919
3,437
3,056
THE GROUP’S LEASING ACTIVITIES AND HOW THESE ARE ACCOUNTED FOR
The Group leases various restaurant sites, offices, and motor vehicles. Rental contracts, particularly for restaurants, are typically
made for fixed periods of 5 to 20 years but may have extension options as described further below.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable by the Group under residual value guarantees;
•
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received;
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which
does not have recent third party financing; and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
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69 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G8: Leases continued
AMOUNTS RECOGNISED IN THE INCOME STATEMENT
The income statement shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Property
Motor vehicles
Impairment charge of right-of-use assets
Properties
Gain on sale and leaseback
Interest expense (included in finance costs)
Expense relating to short-term leases (included in selling marketing and royalty, occupancy,
and administrative expenses)
Expense relating to variable lease payments not included in lease liabilities (included in
occupancy expenses)
2023
$000
47,685
1,192
48,877
31,052
31,052
2023
$000
–
2022
$000
44,008
1,023
45,031
1,609
1,609
2022
$000
1,238
25,376
22,679
778
919
3,437
3,056
THE GROUP’S LEASING ACTIVITIES AND HOW THESE ARE ACCOUNTED FOR
The Group leases various restaurant sites, offices, and motor vehicles. Rental contracts, particularly for restaurants, are typically
made for fixed periods of 5 to 20 years but may have extension options as described further below.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable by the Group under residual value guarantees;
•
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received;
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which
does not have recent third party financing; and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 70
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G8: Leases continued
If a readily observable amortising loan rate is available to the individual lessee (through recent financing or market data) which
has a similar payment profile to the lease, then the Group entities use that rate as a starting point to determine the incremental
borrowing rate.
In the current reporting period, the weighted average lessee’s incremental borrowing rate applied to the lease liabilities was
5.17% (2022: 4.85%)
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• make good obligation costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s
useful life. While the Group revalues its land and buildings that are presented within property, plant and equipment, it has
chosen not to do so for the right-of-use buildings held by the Group.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise IT equipment and small items of office furniture.
VARIABLE LEASE PAYMENTS
Some property leases contain variable payment terms that are linked to sales generated from a restaurant. For individual
restaurants, up to 80% of lease payments are on the basis of variable payment terms with a wide range of sales percentages
applied. Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly
established restaurants. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the
condition that triggers those payments occurs.
EXTENSION AND TERMINATION OPTIONS
Extension and termination options are included in a number of leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held
are exercisable only by the Group and not by the respective lessor.
CRITICAL JUDGEMENTS IN DETERMINING THE LEASE TERM
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are
only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
For leases of restaurant sites, the following factors are normally the most relevant:
•
•
If there are significant penalty payments to terminate (or not extend), the Group is typically reasonably certain to extend (or
not terminate).
If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain
to extend (or not terminate).
• Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption
required to replace the leased asset.
Most extension options in offices and motor vehicles leases have not been included in the lease liability, because the Group
could replace the assets without significant cost or business disruption.
More than 90% of the Group's leases are of restaurants or restaurant sites. These leases range in primary terms of 5 - 20 years, with
multiple 5 - 10 year options available, anywhere up to a total available lease term of 50 years. The Group has applied the below
lease term assumptions to the restaurant and restaurant lease portfolios of each segment, as it is considered representative of
the Group's reasonably certain position. Specific leases are considered on a case-by-case basis when additional knowledge is
available that would result in a different lease term to these assumptions.
G8: Leases continued
Segment
Lease term assumption
KFC Australia
Primary term of the lease, plus options, to an upper limit of 20 years.
KFC Europe
Primary term of the lease, plus next option term where renewal process has commenced.
Taco Bell
Primary term of the lease, plus next option term where renewal process has commenced.
Other
Primary term of the lease, plus next option term where renewal process has commenced.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or
not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee.
MATURITIES OF LEASE LIABILITIES
The table below shows the Group's lease liabilities in relevant maturity groupings based on their contractual maturities. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
amount
$000
$000
$000
$000
$000
2023
2022
$000
71,172
$000
Lease liabilities
68,920
185,812
440,220
766,124
551,511
Lease liabilities
59,837
57,670
158,807
373,916
650,230
477,389
$000
$000
$000
$000
$000
G9: Trade and other payables
Current liabilities
Trade payables and accruals - unsecured
Other payables - unsecured
Total payables
ACCOUNTING POLICY
2023
$000
99,575
16,940
2022
$000
97,944
18,529
116,515
116,473
These amounts represent liabilities for goods and services provided prior to the end of the reporting period and which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
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71 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G8: Leases continued
Segment
Lease term assumption
KFC Australia
Primary term of the lease, plus options, to an upper limit of 20 years.
KFC Europe
Primary term of the lease, plus next option term where renewal process has commenced.
Taco Bell
Primary term of the lease, plus next option term where renewal process has commenced.
Other
Primary term of the lease, plus next option term where renewal process has commenced.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or
not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee.
MATURITIES OF LEASE LIABILITIES
The table below shows the Group's lease liabilities in relevant maturity groupings based on their contractual maturities. The
amounts disclosed in the table are the contractual undiscounted cash flows.
2023
Lease liabilities
2022
Less than
1 year
$000
71,172
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
contractual
cash flows
Carrying
amount
$000
$000
$000
$000
$000
68,920
185,812
440,220
766,124
551,511
$000
$000
$000
$000
$000
$000
Lease liabilities
59,837
57,670
158,807
373,916
650,230
477,389
G9: Trade and other payables
Current liabilities
Trade payables and accruals - unsecured
Other payables - unsecured
Total payables
ACCOUNTING POLICY
2023
$000
99,575
16,940
2022
$000
97,944
18,529
116,515
116,473
These amounts represent liabilities for goods and services provided prior to the end of the reporting period and which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 72
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G10: Provisions
Current
$000
9,123
667
4,169
13,959
Non-
current
$000
2,372
3,846
1,646
7,864
2023
Total
$000
11,495
4,513
5,815
21,823
Current
$000
5,907
548
281
Non-
current
$000
3,954
3,236
–
2022
Total
$000
9,861
3,784
281
6,736
7,190
13,926
Employee benefits
Make good provision
Other provisions
Total provisions
ACCOUNTING POLICY
Employee benefits
Provision has been made in the accounts for benefits accruing to employees up to balance date, such as long service leave
and incentives. The current portion of this liability includes the unconditional entitlements to long service leave where employees
have completed the required period of service. The provisions are measured at their nominal amounts using the remuneration
rates expected to apply at the time of settlement.
In addition, the Group has identified that on certain occasions some employees may have been entitled to receive additional
allowances. A program is underway to review and confirm any instances where this may apply and this program will be
completed in the next financial period. As at 30 April 2023 there is a provision to recognise these additional amounts totalling
$1.7 million (2022: nil), covering the six year period from 1 May 2017 to 30 April 2023.
Accounting estimates and judgements have been made in calculating these additional amounts. Any revisions of the estimates
will be recognised in the period during which they are identified.
Long service leave provisions relating to employees who have not yet completed the required period of service are classified as
non-current. All other employee provisions are classified as a current liability.
All on-costs, including superannuation, payroll tax and workers’ compensation premiums are included in the determination of
provisions.
Make good provision
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount can be reliably estimated. Provisions are not recognised for future operating losses.
The Group is required to restore the leased premises of certain retail restaurants to their original condition upon exit. However, as
leases are traditionally renewed, the Group only recognises a provision for those restaurants where make good costs will result in
a probable outflow of funds. An annual review of leased sites is conducted to determine the present value of the estimated
expenditure required to remove any leasehold improvements and decommission the restaurant.
Onerous contracts
G11: Reserves
Hedging - cash flow hedges
Share based payments
Foreign currency translation
MOVEMENTS:
Cash flow hedges:
Opening balance
Revaluation – gross
Deferred tax
Transfer to net profit - gross
Deferred tax
Closing balance
Share based payments:
Opening balance
Valuation of performance rights
Performance rights vested
Closing balance
Foreign currency translation:
Opening balance
Notes
2023
$000
2022
$000
G12
G12
2023
$000
3,499
1,782
13,460
18,741
2,467
1,700
(510)
(226)
68
3,499
2,087
427
(732)
1,782
10,317
12,328
(9,185)
13,460
2022
$000
2,467
2,087
10,317
14,871
(1,565)
5,488
(1,646)
272
(82)
2,467
1,493
1,200
(606)
2,087
10,828
(4,537)
4,026
10,317
Each reporting period, the group assesses whether any of their contracts are considered to be onerous. The present obligations
arising under any onerous contracts identified are recognised and measured as provisions. An onerous contract is considered to
exist where the group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it.
loss.
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in other
comprehensive income. Amounts are recognised in profit and loss when the associated hedged transaction affects profit and
Exchange fluctuations arising on net investment in hedge
Exchange fluctuations arising on net assets of foreign operations
Closing balance
NATURE AND PURPOSE OF RESERVES
Hedging reserve – cash flow hedges
Share based payments reserve – performance rights
The share based payments reserve is used to recognise the issuance date fair value of performance rights issued to employees
under the Long-Term Incentive Plan and Ownership Share Plan that have not yet vested.
Foreign currency translation reserve
Exchange differences arising on translation and of a hedge of the net investment in foreign operations are recognised in other
comprehensive income and accumulated in a separate reserve within equity. Refer to Note C3 for details on the Group's
accounting policy for hedge accounting.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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73 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes to the Consolidated Financial Statements
G11: Reserves
Hedging - cash flow hedges
Share based payments
Foreign currency translation
MOVEMENTS:
Cash flow hedges:
Opening balance
Revaluation – gross
Deferred tax
Transfer to net profit - gross
Deferred tax
Closing balance
Share based payments:
Opening balance
Valuation of performance rights
Performance rights vested
Closing balance
Foreign currency translation:
Opening balance
Exchange fluctuations arising on net investment in hedge
Exchange fluctuations arising on net assets of foreign operations
Closing balance
NATURE AND PURPOSE OF RESERVES
Hedging reserve – cash flow hedges
2023
$000
3,499
1,782
13,460
18,741
2022
$000
2,467
2,087
10,317
14,871
Notes
2023
$000
2022
$000
G12
G12
2,467
1,700
(510)
(226)
68
3,499
2,087
427
(732)
1,782
10,317
12,328
(9,185)
13,460
(1,565)
5,488
(1,646)
272
(82)
2,467
1,493
1,200
(606)
2,087
10,828
(4,537)
4,026
10,317
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in other
comprehensive income. Amounts are recognised in profit and loss when the associated hedged transaction affects profit and
loss.
Share based payments reserve – performance rights
The share based payments reserve is used to recognise the issuance date fair value of performance rights issued to employees
under the Long-Term Incentive Plan and Ownership Share Plan that have not yet vested.
Foreign currency translation reserve
Exchange differences arising on translation and of a hedge of the net investment in foreign operations are recognised in other
comprehensive income and accumulated in a separate reserve within equity. Refer to Note C3 for details on the Group's
accounting policy for hedge accounting.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 74 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 74
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G12: Tax
INCOME TAX EXPENSE
Income tax expense
Current tax
Deferred tax
Under / (Over) provided in prior reporting periods
Income tax expense is attributable to:
Profit from continuing operations
Notes
Profit from discontinued operations (1) F1
Aggregate income tax expense
Deferred income tax expense/(benefit) included in income tax expense
comprises:
Increase in deferred tax assets
Increase in deferred tax liabilities
2023
$000
13,154
(10,935)
1,680
3,899
3,390
509
3,899
2022
$000
26,018
132
(260)
25,890
25,526
364
25,890
(15,957)
5,022
(10,935)
(17,430)
17,562
132
(1) Comparative figures have been restated to present the impacts of the current period discontinued operations (as outlined in Note F1)
Numerical reconciliation of income tax expense/(benefit) to prima facie tax
payable
Notes
Profit from continuing operations before income tax expense
Profit from discontinued operation before income tax expense
F1
Tax at the Australian tax rate of 30.0% (2022: 30.0%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Other non-deductible expenses
Difference in foreign taxation rates
Non-assessable income received
Changes in tax laws and / or tax rates
Carried forward losses brought to account
Derecognition of previously recognised deductible temporary differences
Current year tax losses for which no deferred income tax was recognised
2023
$000
14,668
1,977
16,645
4,994
2,113
365
(679)
2,909
(7,550)
–
67
2022
$000
79,603
1,086
80,689
24,207
1,293
89
(688)
-
(443)
428
1,264
Amounts under / (over) provided in prior reporting periods
Income tax expense
2,219
26,150
1,680
3,899
2023
$000
(260)
25,890
2022
$000
Notes
Tax expense relating to items of other comprehensive income
Cash flow hedges
G11
(442)
(1,728)
Tax losses
Unused revenue tax losses for which no deferred tax asset has been recognised
Unused capital tax losses for which no deferred tax asset has been recognised
Total unused tax losses for which no deferred tax asset has been recognised
The balance comprises temporary differences attributable to:
G12: Tax continued
DEFERRED TAX BALANCES
Deferred tax assets (DTA)
Depreciation
Employee benefits
Provisions
Lease liabilities
Capitalised costs
Cash flow hedges
Carried forward revenue losses
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
The balance comprises temporary differences attributable to:
Comprehensive Income.
Deferred tax liabilities (DTL)
Right-of-use assets
Inventories
Intangibles
Prepayments
Cash flow hedges
Other
Financial assets at fair value through profit or loss
2023
$000
9,051
64,505
73,556
2023
$000
27,681
2,223
8,309
175,469
12,564
256
56
2022
$000
51,429
64.505
115,934
2022
$000
25,384
3,554
6,256
130,678
1,226
408
–
226,558
167,506
(170,900)
(127,681)
55,658
39,825
2023
$000
2022
$000
151,986
120,997
970
16,456
250
12
1,348
1
979
10,327
458
–
1,034
(966)
171,023
132,829
(170,900)
(127,681)
123
5,148
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax liabilities
Comprehensive Income.
All movements in the DTL were recognised in the Consolidated Income Statement and the Consolidated Statement of
All movements in the DTA were recognised in the Consolidated Income Statement and the Consolidated Statement of
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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75 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G12: Tax continued
Tax losses
Unused revenue tax losses for which no deferred tax asset has been recognised
Unused capital tax losses for which no deferred tax asset has been recognised
Total unused tax losses for which no deferred tax asset has been recognised
DEFERRED TAX BALANCES
Deferred tax assets (DTA)
The balance comprises temporary differences attributable to:
Depreciation
Employee benefits
Provisions
Lease liabilities
Carried forward revenue losses
Capitalised costs
Cash flow hedges
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
2023
$000
9,051
64,505
73,556
2023
$000
27,681
2,223
8,309
175,469
12,564
256
56
2022
$000
51,429
64.505
115,934
2022
$000
25,384
3,554
6,256
130,678
1,226
408
–
226,558
167,506
(170,900)
(127,681)
55,658
39,825
All movements in the DTA were recognised in the Consolidated Income Statement and the Consolidated Statement of
Comprehensive Income.
Deferred tax liabilities (DTL)
The balance comprises temporary differences attributable to:
Right-of-use assets
Inventories
Intangibles
Financial assets at fair value through profit or loss
Prepayments
Cash flow hedges
Other
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax liabilities
2023
$000
2022
$000
151,986
120,997
970
16,456
250
12
1,348
1
979
10,327
458
–
1,034
(966)
171,023
132,829
(170,900)
(127,681)
123
5,148
All movements in the DTL were recognised in the Consolidated Income Statement and the Consolidated Statement of
Comprehensive Income.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 76 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 76
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G12: Tax continued
ACCOUNTING POLICY
Income tax
The income tax expense on revenue for the period is the tax payable on the current period’s taxable income based on the
national income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted in the respective
jurisdiction.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the
entity has a legally enforceable right to offset and intends to settle on a net basis.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Tax consolidation
The Company, as the head entity in the tax consolidated group and its wholly owned Australian controlled entities continue to
account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) and
the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax
consolidated group. Assets or liabilities arising under the tax funding agreement with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the Group.
The entities in the Tax Consolidated Group entered into a tax sharing agreement which, in the opinion of the directors, limits the
joint and several liability of the wholly owned entities within the Tax Consolidated Group in the case of a default by the
Company.
The entities in the Tax Consolidated Group have also entered into a Tax Funding Agreement under which the wholly owned
entities of that group fully compensate the Company for any current tax payable assumed and are compensated by the
Company for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are
transferred to the Company under the tax consolidation legislation. The funding amounts are determined by reference to the
amounts recognised in the wholly owned entities’ financial statements.
G13: Auditor’s remuneration
related practices and non-related audit firms:
During the reporting period the following fees were paid or payable for services provided by the auditor of the parent entity, its
AUDIT AND OTHER ASSURANCE SERVICES
AUDIT SERVICES:
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports and other audit work under the Corporations Act 2001
Audit and review of financial reports and other audit work for foreign subsidiary
Network firm of PricewaterhouseCoopers Australia:
Audit and review of financial reports and other audit work for foreign subsidiary
OTHER ASSURANCE SERVICES:
PricewaterhouseCoopers Australian firm:
Restaurant sales certificates
Agreed upon procedures for covenant calculations
ESG assurance
Taxation advice
Network firm of PricewaterhouseCoopers Australia:
Total remuneration for audit and other assurance services
TAXATION SERVICES
PricewaterhouseCoopers Australian firm:
Tax compliance services, including review of tax returns and allowance claims
Network firm of PricewaterhouseCoopers Australia:
Tax compliance services, including review of company tax returns
Total remuneration for taxation services
OTHER SERVICES
PricewaterhouseCoopers Australian firm:
Acquisition related due diligence
Total remuneration for other services
2023
Whole
dollars
$
2022
Whole
dollars
$
616,311
48,073
517,928
1,182,312
5,400
8,100
35,000
48,500
1,230,812
–
–
–
–
–
–
401,370
45,402
349,618
796,390
25,096
7,650
70,890
10,457
114,093
910,483
46,560
5,011
51,571
120,000
120,000
TOTAL REMUNERATION FOR SERVICES
1,230,812
1,082,054
It is the Group's policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers' expertise and experience with the Group are important. These assignments are principally tax advice,
due diligence reporting on acquisitions and capital raisings, or where PricewaterhouseCoopers is awarded assignments on a
competitive basis. It is the Company's policy to seek competitive tenders for all major consulting projects.
G14: Contingencies
The parent entity and certain controlled entities indicated in Note H1 have entered into a Deed of Cross Guarantee (Amended
and Restated) under which the parent entity has guaranteed any deficiencies of funds on winding up of the controlled entities
which are party to the Deed. At the date of this statement there are reasonable grounds to believe that the Company will be
able to meet any obligations or liabilities to which it is, or may become, subject by virtue of the Deed.
As described in Note B2, CFG Finance Pty Limited (a wholly owned subsidiary) and several other related entities have entered
into Syndicated and Working Capital credit facilities. As a consequence of this, the Company and its subsidiaries became
registered guarantors of all the obligations in respect of these loan facilities.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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77 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G13: Auditor’s remuneration
During the reporting period the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
AUDIT AND OTHER ASSURANCE SERVICES
AUDIT SERVICES:
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports and other audit work under the Corporations Act 2001
Audit and review of financial reports and other audit work for foreign subsidiary
Network firm of PricewaterhouseCoopers Australia:
Audit and review of financial reports and other audit work for foreign subsidiary
OTHER ASSURANCE SERVICES:
PricewaterhouseCoopers Australian firm:
Restaurant sales certificates
Agreed upon procedures for covenant calculations
ESG assurance
Network firm of PricewaterhouseCoopers Australia:
Taxation advice
Total remuneration for audit and other assurance services
TAXATION SERVICES
PricewaterhouseCoopers Australian firm:
Tax compliance services, including review of tax returns and allowance claims
Network firm of PricewaterhouseCoopers Australia:
Tax compliance services, including review of company tax returns
Total remuneration for taxation services
OTHER SERVICES
PricewaterhouseCoopers Australian firm:
Acquisition related due diligence
Total remuneration for other services
2023
Whole
dollars
$
2022
Whole
dollars
$
616,311
48,073
517,928
1,182,312
5,400
8,100
35,000
–
48,500
1,230,812
–
–
–
–
–
401,370
45,402
349,618
796,390
25,096
7,650
70,890
10,457
114,093
910,483
46,560
5,011
51,571
120,000
120,000
TOTAL REMUNERATION FOR SERVICES
1,230,812
1,082,054
It is the Group's policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where
PricewaterhouseCoopers' expertise and experience with the Group are important. These assignments are principally tax advice,
due diligence reporting on acquisitions and capital raisings, or where PricewaterhouseCoopers is awarded assignments on a
competitive basis. It is the Company's policy to seek competitive tenders for all major consulting projects.
G14: Contingencies
The parent entity and certain controlled entities indicated in Note H1 have entered into a Deed of Cross Guarantee (Amended
and Restated) under which the parent entity has guaranteed any deficiencies of funds on winding up of the controlled entities
which are party to the Deed. At the date of this statement there are reasonable grounds to believe that the Company will be
able to meet any obligations or liabilities to which it is, or may become, subject by virtue of the Deed.
As described in Note B2, CFG Finance Pty Limited (a wholly owned subsidiary) and several other related entities have entered
into Syndicated and Working Capital credit facilities. As a consequence of this, the Company and its subsidiaries became
registered guarantors of all the obligations in respect of these loan facilities.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 78 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 78
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H: GROUP STRUCTURE
H1: Subsidiaries and Deed of Cross Guarantee (Amended and Restated)
H2: Parent entity financial information
H1: Subsidiaries and Deed of Cross Guarantee
The Consolidated Financial Statements at 30 April 2023 include the following subsidiaries. The reporting period end of all
subsidiaries is the same as that of the parent entity (a).
Name of entity
Notes
Place of business/
country of
incorporation
Acronym
Percentage of
shares held
CFG Finance Pty Limited
Collins Foods Holding Pty Limited
Collins Foods Finance Pty Limited
Collins Foods Group Pty Ltd
Collins Restaurants Queensland Pty Ltd
Collins Restaurants NSW Pty Ltd
Collins Restaurants West Pty Ltd
Fiscal Nominees Company Pty Ltd
Sizzler Restaurants Group Pty Ltd
Collins Restaurants Management Pty Ltd
Collins Restaurants South Pty Ltd
Collins Foods Subsidiary Pty Ltd
Snag Stand Leasing Pty Ltd
Snag Stand Corporate Pty Limited
Snag Stand Franchising Pty Ltd
Snag Stand International Pty Ltd
Snag Holdings Pty Ltd
Collins Property Development Pty Ltd
Club Sizzler Pty Ltd
Collins Foods Australia Pty Ltd
Collins Finance and Management Pty Ltd
SingCo Trading Pte Ltd
Sizzler International Marks LLC
Sizzler Asia Holdings LLC
Sizzler South East Asia LLC
2023
%
2022
%
Australia
CFGF
100
100
Australia
CFH
100
100
Australia
CFF
100
100
Australia
CFG
100
100
Australia
CRQ
100
100
Australia
CRN
100
100
Australia
CRW
100
100
Australia
FNC
100
100
Australia
SRG
100
100
Australia
CRM
100
100
Australia
CRS
100
100
Australia
CFS
100
100
Australia
SSL
100
100
Australia
SSC
100
100
Australia
SSF
100
100
Australia
SSI
100
100
Australia
SNG
100
100
Australia
CPD
100
100
Australia
CSP
100
100
Australia
CFA
100
100
Australia
CFM
100
100
Singapore
SingCo
100
100
Delaware, USA
SIM
100
100
Delaware, USA
SAH
100
100
(f) Collins Foods Germany GmbH was established on 7 June 2022.
(g) Entities in the process of being liquidated as a result of the restructure of European operations.
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(b)
(c)
(c)
(c)
(c) (d)
Delaware, USA
SSEA
100
100
H1: Subsidiaries and Deed of Cross Guarantee continued
Name of entity
Notes
Place of business/
Acronym
Percentage of
country of
incorporation
shares held
2023
2022
%
%
Sizzler New Zealand LLC
(c) (d)
Delaware, USA
SNZ
100
100
Sizzler Restaurant Services LLC
(c) (d)
Delaware, USA
SRS
100
100
Collins Foods Europe Limited
(c) (g)
United Kingdom
CFEL
100
100
Collins Foods Europe Services Limited
(c) (g)
United Kingdom
CFESL
100
100
Collins Foods Europe Finco Limited
(c) (g)
United Kingdom
CFEFL
100
100
Collins Foods Germany Limited
(c) (g)
United Kingdom
CFGL
100
100
Collins Foods Netherlands Limited
(c) (g)
United Kingdom
CFNL
100
100
Collins Foods SPV B.V. (formerly MAAS KFC Amersfoort B.V.)
(c) (e)
Netherlands
MAAS KFC Utrecht B.V.
(c) (e)
Netherlands
MAAS KFC Veenendaal B.V.
(c) (e)
Netherlands
Taupo Lelystad B.V.
(c) (e)
Netherlands
SPV
UTR
VDL
TAU
Collins Foods Holdings Europe B.V.
Netherlands
CFEH
100
100
Collins Foods Netherlands Operations B.V.
Netherlands
CFNO
100
100
Collins Foods Netherlands Management B.V.
Netherlands
CFNM
100
100
Collins Foods Germany GmbH
(c) (f)
Germany
GmbH
100
–
(c)
(c)
(c)
Horeca Exploitatie Maatschappij De Kok Alexandrium B.V.
(c) (e)
Netherlands
ALEX
Horeca Exploitatie Maatschappij De Kok Spijkenisse B.V.
(c) (e)
Netherlands
SPIJ
Horeca Exploitatie Maatschappij De Kok Binnenwegplein B.V.
(c) (e)
Netherlands
BINN
Horeca Exploitatie Maatschappij De Kok Barendrecht B.V.
(c) (e)
Netherlands
BARE
H.E.M. de Kok Stadion-Boulevard B.V.
(c) (e)
Netherlands
STAD
Horeca Exploitatie Maatschappij De Kok Groene Hilledijk B.V.
(c) (e)
Netherlands
GROE
Horeca Exploitatie Maatschappij J.G.B. De Kok Bergweg B.V.
(c) (e)
Netherlands
BERG
Horeca Exploitatie Maatschappij De Kok Zuidplein B.V.
(c) (e)
Netherlands
Horeca Exploitatie Maatschappij J.G.B. De Kok Kruiskade B.V.
(c) (e)
Netherlands
ZUID
KRUI
(a) Collins Foods Limited is incorporated and domiciled in Australia. The Registered office is located at Level 3, KSD1, 485 Kingsford Smith Drive, Hamilton,
Queensland 4007.
(b) These companies have entered into a Deed of Cross Guarantee (Amended and Restated), dated 27 April 2017, with Collins Foods Limited which provides that all
parties to the deed will guarantee to each creditor payment in full of any debt of each company participating in the deed on winding up of that company. As a
result of the new ASIC Corporations (Wholly owned Companies) Instrument 2016/785 (ASIC Instrument 2016/785) which has replaced ASIC Class Order CO 98/1418,
these companies are relieved from the requirement to prepare financial statements.
(c) These companies are not Australian registered companies and are not covered by the ASIC Instrument 2016/785.
(d) Originally incorporated in Nevada, upon conversion to a Limited Liability Company (LLC) became registered in Delaware.
(e) These companies were merged into CFNO as a result of a restructure of European operations.
–
–
–
–
–
–
–
–
–
–
–
–
–
100
100
100
100
100
100
100
100
100
100
100
100
100
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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79 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H1: Subsidiaries and Deed of Cross Guarantee continued
Name of entity
Notes
Place of business/
country of
incorporation
Acronym
Percentage of
shares held
2023
%
2022
%
Sizzler New Zealand LLC
(c) (d)
Delaware, USA
SNZ
100
100
Sizzler Restaurant Services LLC
(c) (d)
Delaware, USA
SRS
100
100
Collins Foods Europe Limited
(c) (g)
United Kingdom
CFEL
100
100
Collins Foods Europe Services Limited
(c) (g)
United Kingdom
CFESL
100
100
Collins Foods Europe Finco Limited
(c) (g)
United Kingdom
CFEFL
100
100
Collins Foods Germany Limited
(c) (g)
United Kingdom
CFGL
100
100
Collins Foods Netherlands Limited
(c) (g)
United Kingdom
CFNL
100
100
Collins Foods SPV B.V. (formerly MAAS KFC Amersfoort B.V.)
(c) (e)
Netherlands
MAAS KFC Utrecht B.V.
(c) (e)
Netherlands
MAAS KFC Veenendaal B.V.
(c) (e)
Netherlands
Taupo Lelystad B.V.
(c) (e)
Netherlands
SPV
UTR
VDL
TAU
–
–
–
–
100
100
100
100
Collins Foods Holdings Europe B.V.
Collins Foods Netherlands Operations B.V.
Collins Foods Netherlands Management B.V.
(c)
(c)
(c)
Netherlands
CFEH
100
100
Netherlands
CFNO
100
100
Netherlands
CFNM
100
100
Collins Foods Germany GmbH
(c) (f)
Germany
GmbH
100
–
Horeca Exploitatie Maatschappij De Kok Alexandrium B.V.
(c) (e)
Netherlands
ALEX
Horeca Exploitatie Maatschappij De Kok Spijkenisse B.V.
(c) (e)
Netherlands
SPIJ
Horeca Exploitatie Maatschappij De Kok Binnenwegplein B.V.
(c) (e)
Netherlands
BINN
Horeca Exploitatie Maatschappij De Kok Barendrecht B.V.
(c) (e)
Netherlands
BARE
H.E.M. de Kok Stadion-Boulevard B.V.
(c) (e)
Netherlands
STAD
Horeca Exploitatie Maatschappij De Kok Groene Hilledijk B.V.
(c) (e)
Netherlands
GROE
Horeca Exploitatie Maatschappij J.G.B. De Kok Bergweg B.V.
(c) (e)
Netherlands
BERG
Horeca Exploitatie Maatschappij De Kok Zuidplein B.V.
(c) (e)
Netherlands
Horeca Exploitatie Maatschappij J.G.B. De Kok Kruiskade B.V.
(c) (e)
Netherlands
ZUID
KRUI
–
–
–
–
–
–
–
–
–
100
100
100
100
100
100
100
100
100
(a) Collins Foods Limited is incorporated and domiciled in Australia. The Registered office is located at Level 3, KSD1, 485 Kingsford Smith Drive, Hamilton,
Queensland 4007.
(b) These companies have entered into a Deed of Cross Guarantee (Amended and Restated), dated 27 April 2017, with Collins Foods Limited which provides that all
parties to the deed will guarantee to each creditor payment in full of any debt of each company participating in the deed on winding up of that company. As a
result of the new ASIC Corporations (Wholly owned Companies) Instrument 2016/785 (ASIC Instrument 2016/785) which has replaced ASIC Class Order CO 98/1418,
these companies are relieved from the requirement to prepare financial statements.
(c) These companies are not Australian registered companies and are not covered by the ASIC Instrument 2016/785.
(d) Originally incorporated in Nevada, upon conversion to a Limited Liability Company (LLC) became registered in Delaware.
(e) These companies were merged into CFNO as a result of a restructure of European operations.
(f) Collins Foods Germany GmbH was established on 7 June 2022.
(g) Entities in the process of being liquidated as a result of the restructure of European operations.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 80
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H1: Subsidiaries and Deed of Cross Guarantee continued
H1: Subsidiaries and Deed of Cross Guarantee continued
The Consolidated Income Statement, Consolidated Statement of Comprehensive Income and Summary of Movements in
Consolidated Retained Earnings of the entities in the ASIC Instrument 2016/785 ‘Closed Group’ are as follows.
period is as follows:
The Consolidated Balance Sheet of all entities in the ASIC Instrument 2016/785 ‘Closed Group’ as at the end of the reporting
As there are no other parties to the Deed of Cross Guarantee (Amended and Restated), that are controlled by Collins Foods
Limited, the below also represents the ‘Extended Closed Group’.
Closed Group
CONSOLIDATED INCOME STATEMENT
Sales revenue
Cost of sales
Gross profit
Selling, marketing and royalty expenses
Occupancy expenses
Restaurant related expenses
Administration expenses
Other expenses
Other income
Finance costs – net
Other gains/(losses) – net
Profit from operations before income tax
Income tax expense
Profit from operations
Net profit attributable to the Closed Group
Closed Group
2023
$000
2022
$000
1,099,938
(544,082)
555,856
(254,879)
(103,198)
(83,300)
(56,611)
(11,261)
99,476
(26,926)
(1,023)
118,134
(6,078)
112,056
112,056
991,260
(473,796)
517,464
(219,447)
(64,224)
(70,033)
(53,412)
(8,058)
415
(26,096)
2,124
78,733
(24,296)
54,437
54,437
Closed Group
Trade and other payables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit from continuing operations
Other comprehensive income:
Cash flow hedges
Income tax relating to components of other comprehensive income
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income for the reporting period is attributable to:
Owners of the parent
SUMMARY OF MOVEMENTS IN CONSOLIDATED RETAINED EARNINGS
Retained earnings at the beginning of the reporting period
Profit for the period
Dividends provided for or paid
Retained earnings at the end of the reporting period
2023
$000
2022
$000
112,056
54,437
783
(235)
548
112,604
5,760
(1,728)
4,032
58,469
112,604
58,469
Closed Group
2023
$000
127,892
112,056
(31,623)
208,325
2022
$000
102,046
54,437
(28,591)
127,892
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Current tax asset
Other assets
Total current assets
Non-current assets
Intangible assets
Right-of-use assets
Deferred tax assets
Property, plant and equipment
Derivative financial instruments
Other financial assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Total non-current liabilities
2023
$000
48,845
2,742
6,718
2,936
3,562
1,598
66,401
173,418
347,628
379,792
55,658
1,558
108,852
90,751
28,269
87
13,681
132,788
194,893
422,439
6,232
623,564
2022
$000
74,360
1,159
6,258
662
–
2,096
84,535
173,380
341,896
364,011
39,825
2,784
134,244
90,689
25,566
5,023
6,488
127,766
210,217
373,026
6,218
589,461
1,066,906
1,056,140
1,133,307
1,140,675
756,352
717,227
376,955
423,448
297,372
(128,742)
208,325
376,955
291,394
4,162
127,892
423,448
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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81 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H1: Subsidiaries and Deed of Cross Guarantee continued
The Consolidated Balance Sheet of all entities in the ASIC Instrument 2016/785 ‘Closed Group’ as at the end of the reporting
period is as follows:
Closed Group
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
Current tax asset
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax assets
Derivative financial instruments
Other financial assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
2023
$000
48,845
2,742
6,718
2,936
3,562
1,598
66,401
173,418
347,628
379,792
55,658
1,558
108,852
2022
$000
74,360
1,159
6,258
662
–
2,096
84,535
173,380
341,896
364,011
39,825
2,784
134,244
1,066,906
1,056,140
1,133,307
1,140,675
90,751
28,269
87
13,681
132,788
194,893
422,439
6,232
623,564
90,689
25,566
5,023
6,488
127,766
210,217
373,026
6,218
589,461
756,352
717,227
376,955
423,448
297,372
(128,742)
208,325
376,955
291,394
4,162
127,892
423,448
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 82
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H2: Parent entity financial information
SUMMARY FINANCIAL INFORMATION
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Issued capital (1)
Reserves
Retained earnings
Profit or loss for the period
Total comprehensive income
2023
$000
2022
$000
491,548
516,071
–
491,548
121,482
364
121,846
369,702
343,703
1,782
24,217
369,702
28,423
28,423
–
516,071
148,459
379
148,838
367,233
337,725
2,080
27,428
367,233
46,644
46,644
(1) Represents share capital of the parent entity. This differs from the share capital of the Group due to the capital reconstruction of the Group treated as a reverse
acquisition in the 2012 reporting period.
GUARANTEES ENTERED INTO BY THE PARENT ENTITY
The parent entity has provided unsecured financial guarantees in respect of bank loan facilities amounting to $200 million and
€120 million as stated in Note B2. In addition, there are cross guarantees given by the parent entity as described in Note H1. All
controlled entities will together be capable of meeting their obligations as and when they fall due by virtue to the Deed of Cross
Guarantee (Amended and Restated) dated 27 April 2017. The parent entity has guaranteed to financially support a number of
its international subsidiaries until July 2024. No liability was recognised by the parent entity in relation to these guarantees, as
their fair value is considered immaterial.
CONTINGENT LIABILITIES OF THE PARENT ENTITY
Except as described above in relation to guarantees, the parent entity did not have any contingent liabilities as at 30 April 2023
(2022: nil).
I: BASIS OF PREPARATION AND OTHER ACCOUNTING POLICIES
I1: Basis of preparation
I2: Changes to accounting policies
I3: Other accounting policies
I1: Basis of preparation
COMPLIANCE
MEASUREMENT
GOING CONCERN
generated cash resources.
(refer to Note B2).
CONSOLIDATION
financial statements.
REPORTING PERIOD
May 2022).
FOREIGN CURRENCIES
These financial statements have been prepared as a general purpose financial report in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group
Interpretations and the Corporations Act 2001. Collins Foods Limited is a for-profit entity for the purpose of preparing the
consolidated financial statements.
The Consolidated Financial Statements of the Group comply with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
Collins Foods Limited is a for-profit entity for the purpose of preparing the Consolidated Financial Statements. The financial
statements have also been prepared under the historical cost convention, as modified by the revaluation of financial assets
and liabilities (including derivative instruments).
The financial report has been prepared on a going concern basis. The Directors are of the opinion that the Group will be able to
continue to operate as a going concern having regard to available non-current debt facilities and the Group’s internally
In the current reporting period, the Group has a net current liability position of $48.9 million. The predominant reason for this net
current liability position is the application of AASB16, with lease payments due in the next financial year recognised as current
liabilities. The Group does not deem this to be a risk to its’ going concern, as excluding lease liabilities there would be a net
current liability position of $4.2 million with undrawn bank loan facilities of $83.1 million and undrawn working capital facilities of
$23.3 million. The Group’s loan covenants are based on results excluding the impact of AASB16. The current covenant ratios
have significant headroom at current performance and there are sufficient undrawn facilities available, both within the Working
Capital Facility and Bank Loan Facility, should the Group require access to additional funds, all repayable beyond 12 months
The Consolidated Financial Statements include the financial statements of the parent entity, Collins Foods Limited (the
Company) and its subsidiaries (together referred to as the Group) (see Note H1 on subsidiaries). All transactions and balances
between companies in the Group are eliminated on consolidation. Subsidiaries are all those entities over which the Company
has the power to govern the financial and operating results and policies and often accompanies a shareholding of more than
one-half of the voting rights. The results of subsidiaries acquired or disposed of during the reporting period are included in the
Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of
disposal, as appropriate. Consistent accounting policies are employed in the preparation and presentation of the consolidated
The Group utilises a fifty-two, fifty-three week reporting period ending on the Sunday nearest to 30 April. The 2023 reporting
period comprised the fifty-two weeks which ended on 30 April 2023 (2022: a fifty-two week reporting period which ended on 1
Items included in the financial statements of each of the Group entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The Consolidated Financial Statements are
presented in Australian dollars, which is the functional and presentation currency of the Company.
Transactions in foreign currencies are converted at the exchange rates in effect at the dates of each transaction. Amounts
payable to or by the Group in foreign currencies have been translated into Australian currency at the exchange rates ruling on
balance date. Gains and losses arising from fluctuations in exchange rates on monetary assets and liabilities are included in the
Consolidated Income Statement in the period in which the exchange rates change, except when deferred in equity as
qualifying cash flow hedges.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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83 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I: BASIS OF PREPARATION AND OTHER ACCOUNTING POLICIES
Notes to the Consolidated Financial Statements
I1: Basis of preparation
I2: Changes to accounting policies
I3: Other accounting policies
I1: Basis of preparation
COMPLIANCE
These financial statements have been prepared as a general purpose financial report in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group
Interpretations and the Corporations Act 2001. Collins Foods Limited is a for-profit entity for the purpose of preparing the
consolidated financial statements.
The Consolidated Financial Statements of the Group comply with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
MEASUREMENT
Collins Foods Limited is a for-profit entity for the purpose of preparing the Consolidated Financial Statements. The financial
statements have also been prepared under the historical cost convention, as modified by the revaluation of financial assets
and liabilities (including derivative instruments).
GOING CONCERN
The financial report has been prepared on a going concern basis. The Directors are of the opinion that the Group will be able to
continue to operate as a going concern having regard to available non-current debt facilities and the Group’s internally
generated cash resources.
In the current reporting period, the Group has a net current liability position of $48.9 million. The predominant reason for this net
current liability position is the application of AASB16, with lease payments due in the next financial year recognised as current
liabilities. The Group does not deem this to be a risk to its’ going concern, as excluding lease liabilities there would be a net
current liability position of $4.2 million with undrawn bank loan facilities of $83.1 million and undrawn working capital facilities of
$23.3 million. The Group’s loan covenants are based on results excluding the impact of AASB16. The current covenant ratios
have significant headroom at current performance and there are sufficient undrawn facilities available, both within the Working
Capital Facility and Bank Loan Facility, should the Group require access to additional funds, all repayable beyond 12 months
(refer to Note B2).
CONSOLIDATION
The Consolidated Financial Statements include the financial statements of the parent entity, Collins Foods Limited (the
Company) and its subsidiaries (together referred to as the Group) (see Note H1 on subsidiaries). All transactions and balances
between companies in the Group are eliminated on consolidation. Subsidiaries are all those entities over which the Company
has the power to govern the financial and operating results and policies and often accompanies a shareholding of more than
one-half of the voting rights. The results of subsidiaries acquired or disposed of during the reporting period are included in the
Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of
disposal, as appropriate. Consistent accounting policies are employed in the preparation and presentation of the consolidated
financial statements.
REPORTING PERIOD
The Group utilises a fifty-two, fifty-three week reporting period ending on the Sunday nearest to 30 April. The 2023 reporting
period comprised the fifty-two weeks which ended on 30 April 2023 (2022: a fifty-two week reporting period which ended on 1
May 2022).
FOREIGN CURRENCIES
Items included in the financial statements of each of the Group entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The Consolidated Financial Statements are
presented in Australian dollars, which is the functional and presentation currency of the Company.
Transactions in foreign currencies are converted at the exchange rates in effect at the dates of each transaction. Amounts
payable to or by the Group in foreign currencies have been translated into Australian currency at the exchange rates ruling on
balance date. Gains and losses arising from fluctuations in exchange rates on monetary assets and liabilities are included in the
Consolidated Income Statement in the period in which the exchange rates change, except when deferred in equity as
qualifying cash flow hedges.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 84
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I1: Basis of preparation continued
The foreign currency results and financial position of foreign operations are translated into Australian dollars as follows:
• assets and liabilities at the exchange rate at the end of the reporting period;
•
income and expenses at the average exchange rates for the reporting period; with
• all resulting exchange differences recognised in other comprehensive income and accumulated in equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the exchange rate at the end of the reporting period.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under
the circumstances.
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
certain assets and liabilities within the next annual reporting period are included in the following notes:
• Note A2 Business combinations;
• Note G5 Property, plant and equipment;
• Note G6 Non-current assets - intangible assets;
• Note G7 Impairment of assets;
• Note G8 Leases; and
• Note G10 Provisions.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued
by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial report.
Amounts in the financial report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in
certain cases, the nearest dollar.
COMPARATIVES AND RESTATEMENTS OF PRIOR YEAR BALANCES
Comparatives have been reclassified where appropriate to enhance comparability.
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
The Group has not applied any new standards or amendments for the first time for their annual reporting period commencing 2
May 2022.
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Certain new accounting standards and interpretations have been published that are not mandatory for 30 April 2023 reporting
periods and have not been early adopted by the group. The Group’s assessment of the impact of these new standards and
interpretations is that the impact to the Group is immaterial. At this stage the Group does not intend to adopt any of the new
standards before the effective dates.
I2: Changes in accounting policies
The accounting policies adopted in this report have been consistently applied to each entity in the Group and are consistent
with those of the prior reporting period.
I3: Other accounting policies
GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST) except:
• where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of
acquisition of an asset or as part of an item of expense; or
•
for receivables and payables which are recognised inclusive of GST.
The net amount of GST payable to the taxation authority is included as part of trade and other payables (see Note G9).
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis. The GST component of cash flows arising
from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating
For the purposes of the Consolidated Income Statement, cost of sales includes the carrying amount of inventories sold during
the reporting period and an estimated allocation of labour incurred in relation to preparing those inventories for sale.
Occupancy expenses include: fixed rentals, contingent rentals, land tax, outgoings and depreciation relating to buildings and
Restaurant related expenses include: utilities, maintenance, labour and on-costs (except those allocated to cost of sales),
cleaning costs, depreciation of plant and equipment (owned and leased) located in restaurants and amortisation of franchise
cash flows.
COST OF SALES
OCCUPANCY EXPENSES
leasehold improvements.
RESTAURANT RELATED EXPENSES
rights.
INVENTORIES
OTHER INCOME
Inventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis and includes
expenditure incurred in acquiring the stock and bringing it to the existing condition and location.
Interest income is recognised on a time proportion basis using the effective interest method.
Also included in other income is development agreement income, which is related to achieving targets included in
development agreements. This is recognised at a point in time when the targets are achieved.
Other items of miscellaneous income are also included in this amount.
GOVERNMENT GRANTS
Grants from Australian and overseas governments are recognised at their fair value where there is a reasonable assurance that
the grant will be received, and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with
the costs that they are intended to compensate. The grant is recognised under the profit or loss by deducting the value from
the related expense the grant was received for.
Traineeship grants are accounted for as a reduction of the related expense.
Government grants were received by the Group in the current year for traineeships, amounting to $6.1 million.
BUSINESS COMBINATIONS UNDER COMMON CONTROL
When an entity within the Group acquires an entity under common control, the acquiring entity consolidates the carrying values
of the acquired entity’s asset and liabilities from the date of acquisition. The consolidated financial statements of the Group
include the income and expenditures from the date of acquisition. Any difference between the fair value of the consideration
paid/transferred by the acquirer and the net assets / (liabilities) of the acquired are taken to the common control reserve in the
equity section of the balance sheet.
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85 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I3: Other accounting policies
GOODS AND SERVICES TAX
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST) except:
• where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of
acquisition of an asset or as part of an item of expense; or
•
for receivables and payables which are recognised inclusive of GST.
The net amount of GST payable to the taxation authority is included as part of trade and other payables (see Note G9).
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis. The GST component of cash flows arising
from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating
cash flows.
COST OF SALES
For the purposes of the Consolidated Income Statement, cost of sales includes the carrying amount of inventories sold during
the reporting period and an estimated allocation of labour incurred in relation to preparing those inventories for sale.
OCCUPANCY EXPENSES
Occupancy expenses include: fixed rentals, contingent rentals, land tax, outgoings and depreciation relating to buildings and
leasehold improvements.
RESTAURANT RELATED EXPENSES
Restaurant related expenses include: utilities, maintenance, labour and on-costs (except those allocated to cost of sales),
cleaning costs, depreciation of plant and equipment (owned and leased) located in restaurants and amortisation of franchise
rights.
INVENTORIES
Inventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis and includes
expenditure incurred in acquiring the stock and bringing it to the existing condition and location.
OTHER INCOME
Interest income is recognised on a time proportion basis using the effective interest method.
Also included in other income is development agreement income, which is related to achieving targets included in
development agreements. This is recognised at a point in time when the targets are achieved.
Other items of miscellaneous income are also included in this amount.
GOVERNMENT GRANTS
Grants from Australian and overseas governments are recognised at their fair value where there is a reasonable assurance that
the grant will be received, and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with
the costs that they are intended to compensate. The grant is recognised under the profit or loss by deducting the value from
the related expense the grant was received for.
Traineeship grants are accounted for as a reduction of the related expense.
Government grants were received by the Group in the current year for traineeships, amounting to $6.1 million.
BUSINESS COMBINATIONS UNDER COMMON CONTROL
When an entity within the Group acquires an entity under common control, the acquiring entity consolidates the carrying values
of the acquired entity’s asset and liabilities from the date of acquisition. The consolidated financial statements of the Group
include the income and expenditures from the date of acquisition. Any difference between the fair value of the consideration
paid/transferred by the acquirer and the net assets / (liabilities) of the acquired are taken to the common control reserve in the
equity section of the balance sheet.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 86
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
J: SUBSEQUENT EVENTS
J1: Subsequent events
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL PERIOD
On 2 May 2023, Collins Foods announced that its wholly owned Dutch subsidiary, Collins Foods Netherlands Operations B.V.
completed the acquisition of eight KFC restaurants in the Netherlands from R. Sambo Holding B.V.
The financial effects of this transaction have not been recognised at 30 April 2023 and the operating results and assets and
liabilities of the acquired company will be consolidated from 2 May 2023. The acquisition is expected to deliver additional scale
and to support in further leveraging the Group’s experience and operational capabilities in the Netherlands.
The purchase price payable was €8.0 million ($13.3 million), subject to adjustments. In addition, contingent consideration is also
payable as a component of consideration.
At the time the financial statements were authorised for issue, the Group had not completed the accounting for the acquisition.
In particular, the fair values of the assets and liabilities acquired are unable to be fully determined as the independent
valuations have not been completed. Further, the fair value of the contingent consideration is unable to be determined at this
time.
Full purchase price accounting will be finalised and disclosed in the 2024 half-year interim financial report.
This declaration is made in accordance with a resolution of the Directors.
On 23 February 2023, the Group signed a non-binding memorandum of understanding to sell the 100% owned SingCo Trading
Pte. Ltd Group (SingCo) for SGD20.2 million. The associated SingCo assets and liabilities are consequently presented as available
for sale and is reported as a discontinued operation as SingCo represents an identifiable, single geographical area of
operations.
The transaction is anticipated to complete in mid July 2023 and the full impact, including any gain on sale, will be disclosed in
the 2024 half-year interim financial report.
Other than noted above, the Group is not aware of any matters or circumstances that have arisen since the end of the
financial year which have significantly or may significantly affect the operations and results of the Group.
Robert Kaye SC
Chair
Brisbane
27 June 2023
DIRECTOR’S DECLARATION
In the Directors’ opinion:
reporting requirements; and
for the period ended on that date;
due and payable; and
•
the financial statements and notes set out on pages 30 to 87 are in accordance with the Corporations Act 2001, including:
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
giving a true and fair view of the consolidated entity’s financial position as at 30 April 2023 and of its performance
•
there are reasonable grounds to believe that Collins Foods Limited will be able to pay its debts as and when they become
• at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in Note H1 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the Deed of Cross Guarantee (Amended and Restated) described in Note H1.
Note I1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director & Chief Executive Officer and the Group Chief
Financial Officer required by section 295A of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors.
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87 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 88 of 97
DIRECTORS' DECLARATION
DIRECTOR’S DECLARATION
In the Directors’ opinion:
•
the financial statements and notes set out on pages 30 to 87 are in accordance with the Corporations Act 2001, including:
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 April 2023 and of its performance
for the period ended on that date;
•
there are reasonable grounds to believe that Collins Foods Limited will be able to pay its debts as and when they become
due and payable; and
• at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in Note H1 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue
of the Deed of Cross Guarantee (Amended and Restated) described in Note H1.
Note I1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director & Chief Executive Officer and the Group Chief
Financial Officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
This report is made in accordance with a resolution of Directors.
Robert Kaye SC
Chair
Brisbane
27 June 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 88
Independent auditor’s report
Independent auditor’s report
To the members of Collins Foods Limited
To the members of Collins Foods Limited
Report on the audit of the financial report
Report on the audit of the financial report
Our opinion
Our opinion
In our opinion:
In our opinion:
The accompanying financial report of Collins Foods Limited (the Company) and its controlled entities
The accompanying financial report of Collins Foods Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 April 2023 and of its financial
(a) giving a true and fair view of the Group's financial position as at 30 April 2023 and of its financial
performance for the period 2 May 2022 to 30 April 2023
performance for the period 2 May 2022 to 30 April 2023
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
What we have audited
The Group financial report comprises:
The Group financial report comprises:
●
●
●
●
●
●
the consolidated balance sheet as at 30 April 2023
the consolidated balance sheet as at 30 April 2023
the consolidated income statement for the period 2 May 2022 to 30 April 2023
the consolidated income statement for the period 2 May 2022 to 30 April 2023
the consolidated statement of comprehensive income for the period 2 May 2022 to 30 April
the consolidated statement of comprehensive income for the period 2 May 2022 to 30 April
2023
2023
the consolidated statement of changes in equity for the period 2 May 2022 to 30 April 2023
the consolidated statement of changes in equity for the period 2 May 2022 to 30 April 2023
the consolidated statement of cash flows for the period 2 May 2022 to 30 April 2023
the consolidated statement of cash flows for the period 2 May 2022 to 30 April 2023
the notes to the consolidated financial statements, which include significant accounting policies
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
and other explanatory information
the directors’ declaration.
the directors’ declaration.
●
●
●
●
●
●
●
●
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
for our opinion.
Independence
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999
T: +61 7 3257 5000, F: +61 7 3257 5999
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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89 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
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INDEPENDENT AUDITOR'S REPORT (CONTINUED)
Independent Auditor’s Report
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
Key audit matters
● For the purpose of our audit
we used overall Group
materiality of $3.4m, which
represents approximately 5%
of the profit from continuing
operations before income tax,
adjusted for the Taco Bell
impairment and asset write-
offs, onerous provision and
restaurant closure costs.
● We applied this threshold,
together with qualitative
considerations, to determine
the scope of our audit and the
nature, timing and extent of
our audit procedures and to
evaluate the effect of
misstatements on the financial
report as a whole.
● We chose Group profit from
continuing operations before
income tax because, in our
view, it is the benchmark
against which the performance
of the Group is most
commonly measured. We
adjusted for the Taco Bell
impairment and asset write-
offs, onerous provision and
restaurant closure costs as
they are unusual or
● Our audit focused on where the
● Amongst other relevant
topics, we communicated
the following key audit
matters to the Audit and
Risk Committee:
−
−
Impairment of Taco
Bell restaurant
assets
Accounting for
leases in accordance
with AASB 16
Leases
● These are further
described in the Key
audit matters section of
our report.
●
Group made subjective judgements;
for example, significant accounting
estimates involving assumptions and
inherently uncertain future events.
In establishing the overall approach
to the Group audit, we determined
the type of audit work that needed to
be performed by us, as the Group
engagement team, and by
component auditors in the
Netherlands and Germany operating
under our instruction.
● We structured our audit as follows:
− We performed audit procedures
over the Australian & Asian
operations, in addition to
auditing the consolidation of the
Group's reporting units into the
Group's financial report.
Component auditors in the
Netherlands and Germany
performed audit procedures over
the Group’s European
operations.
-
●
For the work performed by
component auditors in the
Netherlands and Germany, we
determined the level of involvement
we needed to have in the audit work
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INDEPENDENT AUDITOR'S REPORT (CONTINUED)
Independent Auditor’s Report
infrequently occurring items
impacting profit and loss.
● We utilised a 5% threshold
based on our professional
judgement, noting it is within
the range of commonly
acceptable thresholds.
at these locations to be satisfied that
sufficient audit evidence had been
obtained as a basis for our opinion
on the Group financial report as a
whole. This included active dialogue
throughout the year through
discussions, issuing written
instructions, receiving formal
interoffice reporting, as well as
attending meetings with local
management.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Impairment of Taco Bell restaurant assets
Impairment charge comprises of Property, plant and
equipment $20.2 million, Franchise rights $1.1 million
and Right-of-use assets $27.8 million (Refer to note
G7)
The Group assesses recoverability of the Taco Bell
restaurant assets for each individual restaurant. An
impairment indicators analysis is performed, and where
indicators are present, impairment models are then
prepared on a value in use basis to determine whether
the carrying amount is recoverable.
Following the Group’s assessment, a pre-tax
impairment charge of $49.1 million was recorded in
relation to the Taco Bell stores, largely comprising
$20.2 million for Property, plant and equipment,
$1.1 million for Franchise rights, and $27.8 million for
Right-of-use assets.
We considered this a key audit matter given the
financial significance of the Taco Bell restaurant asset
balances in the Group’s balance sheet and the
significant level of judgement and estimation involved
in determining the value in use for each restaurant with
indicators of impairment.
We performed the following audit procedures in relation
to the Group’s impairment assessment of Taco Bell
restaurant assets, amongst others:
●
Evaluated the reasonableness of
management’s impairment indicator
assessment.
● Developed an understanding of the process
undertaken by the Group in the preparation of
the impairment models used to assess the
recoverable amount of the restaurant assets
(the “impairment models”).
Tested the mathematical accuracy of the
underlying calculations in the impairment
models.
●
● Compared the FY2023 actual results with
●
●
●
prior corresponding reporting period forecasts
to assess the historical accuracy of the
Group’s forecasting processes.
Assessed the reasonableness of growth rates
used with reference to historical results.
Evaluated the appropriateness of the discount
rate and long-term growth rate assumptions in
the impairment models, with the support of
PwC valuation experts.
Evaluated the adequacy of the disclosures
made in note G7: Impairment of assets to the
financial report in light of the requirements of
Australian Accounting Standards.
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91 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit matter
Accounting for leases in accordance with AASB 16
Leases
Right-of-use assets $465.8 million, Lease liabilities
$551.5 million (Refer to note G8)
The Group applies Australian Accounting Standard
AASB 16 Leases in accounting for the Group’s portfolio
of restaurant leases. As a result, Right-of-use assets
and Lease liabilities are recognised in the balance
sheet.
We considered this a key audit matter given the
financial significance of the related balances in the
Group’s balance sheet and the critical judgements
used in determining the lease term assumptions in the
lease calculations, as well as the significant amount of
audit effort in auditing the balances.
We performed the following audit procedures in relation
the accounting for leases in accordance with AASB 16
Leases:
●
●
●
Assessed whether the Group's accounting
policies are in accordance with the
requirements of AASB 16 Leases.
Evaluated the adequacy of the disclosures
made in note G8 in light of the requirements
of Australian Accounting Standards.
Evaluated the judgements applied by the
Group in determining the probability of
exercising extension options for each of the
Group’s operating segments.
For a sample of lease agreements, we:
●
●
●
Evaluated the lease calculation against the
terms of the lease agreement and the
requirements of AASB 16 Leases.
Tested the mathematical accuracy of the
lease calculations.
Evaluated the appropriateness of the lease
term applied and the Group’s assumptions
relating to the exercise of option periods.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the period 2 May 2022 to 30 April 2023, but does not
include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report,
the other information we obtained included the Directors Report, Shareholder Information and
Corporate Directory. We expect the remaining other information to be made available to us after the
date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
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Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 11 to 25 of the directors’ report for the
period 2 May 2022 to 30 April 2023.
In our opinion, the remuneration report of Collins Foods Limited for the period 2 May 2022 to 30 April
2023 complies with section 300A of the Corporations Act 2001.
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93 FINANCIAL REPORT 2023 | COLLINS FOODS LIMITED
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Independent Auditor’s Report
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Michael Crowe
Partner
Brisbane
27 June 2023
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 94 of 97
COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 94
SHAREHOLDER INFORMATION
Shareholder information that has not been stated elsewhere in the Annual Report is set out below. The shareholder information
set out below was applicable as at the close of trading on 19 June 2023.
Distribution of equity securities
Analysis of the number of equity security holders by size of holding and the total percentage of securities in that class held
by the holders in each category:
Number of
shareholders of
ordinary shares
Percentage of total
ordinary shares on
issue
%
Number of holders
of performance
rights
Percentage of
performance rights
on issue
%
Number of holders
of ownership share
plan rights
Percentage of
ownership share
plan rights on issue
%
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
TOTAL
6,447
4,069
736
452
44
11,748
2.24
8.18
4.54
8.67
76.37
100.00
15
24
1
9
-
29
2.98
8.37
1.16
87.49
-
100.00
391
100%
-
-
-
-
-
-
-
-
391
100%
117,322,572
890,255
239,535
TOTAL ORDINARY SHARES ON ISSUE
TOTAL UNQUOTED PERFORMANCE RIGHTS ON ISSUE
TOTAL UNQUOTED OWNERSHIP SHARE PLAN RIGHTS ON ISSUE
There were 716 holders of less than a marketable parcel of ordinary shares.
Equity security holders
The names of the 20 largest holders of the only class of quoted equity securities are listed below:
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MR KEVIN WILLIAM JOSEPH PERKINS
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
CHRIKIM PTY LTD
MRS HEATHER LYNNETTE GRACE
ANACACIA PTY LTD
CHRIKIM PTY LTD
PERKINS FAMILY INVESTMENT CORPORATION PTY LTD
CITICORP NOMINEES PTY LIMITED
MICHAEL KEMP PTY LTD
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
MS DEBORAH LEE CHOW + MR EDWARD CHOW
MICHELE TAYLOR PTY LTD
TOTAL
Number held
ORDINARY SHARES
Percentage of
issued shares %
24,829,100
18,707,975
16,531,416
6,750,574
6,709,741
2,932,541
2,835,004
1,711,889
888,636
796,585
429,801
388,093
369,421
327,273
308,329
300,910
284,212
280,845
272,703
266,319
21.16
15.95
14.09
5.75
5.72
2.50
2.42
1.46
0.76
0.68
0.37
0.33
0.31
0.28
0.26
0.26
0.24
0.24
0.23
0.23
85,921,367
73.24
Stock exchange listings
Collins Foods Limited shares are listed on the Australian Securities Exchange
Website address
www.collinsfoods.com
The Collins Foods Corporate Governance Statement is located at www.collinsfoods.com/investors/corporate-governance/
CORPORATE DIRECTORY
Directors
Robert Kaye SC, Chair
Drew O’Malley, Managing Director & CEO
Company Secretary
Principal registered office in Australia
Level 3, KSD1, 485 Kingsford Smith Drive
Share and debenture register
Computershare Investor Services Pty Ltd
Nicki Anderson
Mark Hawthorne
Christine Holman
Kevin Perkins
Russell Tate
Frances Finucan
Hamilton QLD 4007
Telephone: +61 7 3352 0800
Level 1, 200 Mary Street
Brisbane QLD 4000
Telephone: 1300 850 505
Outside Australia: +61 3 9415 4000
PricewaterhouseCoopers
480 Queen Street
Brisbane QLD 4000
Auditor
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Substantial holders
Substantial holders (including associate holdings) in the Company, based on the most recent substantial holder notices lodged
with the Company and ASX, are set out below:
Shareholder information
Kevin Perkins
Yarra Capital Management Limited
Challenger Limited
Restricted Securities and share buy-backs
A voluntary holding lock will be applied to:
ORDINARY SHARES
Number held
Percentage %
7,241,484
7,230,900
7,730,844
6.18
6.16
6.59
• 8,340 fully paid ordinary shares for a period of 12 months, if they are issued, upon the vesting of 8,340 performance rights in
accordance with the rules of the LTIP; and
• 32,508 fully paid ordinary shares for a period of 24 months, if they are issued, upon the vesting of 32,508 performance rights in
accordance with the rules of the LTIP.
The Company is not currently conducting an on-market share buy-back.
Voting rights
FULLY PAID ORDINARY SHARES
On a show of hands every member present at a meeting in person or by proxy shall have one vote. Upon a poll, each share
shall have one vote.
PERFORMANCE RIGHTS
The performance rights do not have any voting rights. The fully paid ordinary shares to be allotted on the exercise of the
performance rights will have the voting rights noted above for fully paid ordinary shares.
CORPORATE DIRECTORY
Directors
Robert Kaye SC, Chair
Drew O’Malley, Managing Director & CEO
Nicki Anderson
Mark Hawthorne
Christine Holman
Kevin Perkins
Russell Tate
Company Secretary
Frances Finucan
Principal registered office in Australia
Share and debenture register
Auditor
Level 3, KSD1, 485 Kingsford Smith Drive
Hamilton QLD 4007
Telephone: +61 7 3352 0800
Computershare Investor Services Pty Ltd
Level 1, 200 Mary Street
Brisbane QLD 4000
Telephone: 1300 850 505
Outside Australia: +61 3 9415 4000
PricewaterhouseCoopers
480 Queen Street
Brisbane QLD 4000
Stock exchange listings
Collins Foods Limited shares are listed on the Australian Securities Exchange
Website address
www.collinsfoods.com
The Collins Foods Corporate Governance Statement is located at www.collinsfoods.com/investors/corporate-governance/
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
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COLLINS FOODS LIMITED | FINANCIAL REPORT 2023 96
Collins Foods Limited ACN 151 420 781 | Financial Report - for the reporting period ended 30 April 2023
Page 97 of 97
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