Shares in KFC operator Collins Foods jump after announcing Germany expansion

Shares in Australia’s biggest KFC operator, Collins Foods, have jumped after announcing it will ramp up its push into Germany to capitalise on the country’s growing appetite for fried chicken.

The ASX-listed company late on Wednesday announced it had signed a deal to acquire eight KFC restaurants in Bavaria for about €31.1 million ($50.2m) as it eyes up to 90 stores over the next four years. It sent shares 6.2 per cent higher to $10 at 9am on Thursday.

Collins Foods managing director Xavier Simonet said the deal would provide it with a platform to expand in one of Germany’s most populated and wealthiest states.

“There is a significant growth opportunity for Collins Foods in the German market, and we are pleased to be executing on our expansion in a disciplined manner,” he said.

“The KFC brand has substantial potential in Germany with approximately a fifth of the store footprint of the largest competitor, McDonald’s.”

The deal increases Collins Foods’ German store network by 50 per cent, adding to the 17 stores it already operates across North Rhine-Westphalia and Baden-Wurttemberg.

In a trading update accompanying Wednesday’s announcement, Collins Foods said total sales grew 6.2 per cent in Australia and up 9.1 per cent in Germany in the second-half to date.

Speaking to The Nightly in December, Mr Simonet said Germany was a “strategic market” because of its “big quick-service-restaurant market”.

“We believe that we can accelerate growth and expand into Germany quickly,” he said at the time.

“(This could be through) us opening new restaurants in specific areas, but also potentially the opportunity to acquire from somebody else a network of stores and get scale more quickly.”