FAST food restaurant operator Collins Foods has returned to profit as its grows its KFC network while closing loss-making Sizzler restaurants.

Collins Foods reported a $29.1 million full-year profit, bouncing back from the $10.4 million loss booked a year ago following a $37.5 million writedown of the Sizzler brand.

The group’s revenue for the 12 months to May 1 rose 0.5 per cent to $574.3 million, although Sizzler revenue declined nearly 18 per cent to $72.6 million, partly due to a $1.3 million pre-tax hit from the closure of four restaurants.

Collins Foods now owns 22 Sizzler restaurants in Australia but will continue to grow its network of 65 franchised Sizzler stores in Thailand, China and Japan.

As announced last year, Sizzler is managed as a “non-core business” and so has not been allocated any growth capital.

“Despite the decline in sales, our ongoing focus on cost management enabled margins to be held, which in turn led to a positive EBITDA contribution for the period,” Collins Foods chief executive Graham Maxwell said.

The company says it will “continue to monitor our remaining restaurants closely and take appropriate action where necessary” during FY17.

Mr Maxwell said the company’s plan to focus on KFC in Australia was working.

“Strong sales across our KFC restaurants were driven by excellent core product offerings combined with new product innovations and good value offers,” he said in a statement to the ASX on Tuesday.

“We will maintain our investment in the KFC business with plans for up to eight new restaurant builds in addition to 14 major remodels.” The group has an extra five KFC restaurants compared to a year ago, totalling 177, and plans to consolidate a further 13 restaurants into the Collins Foods network, while looking for more acquisitions.

International food giant Yum! Brands owns the majority of KFC restaurants in Australia, with 630 locations.

Collins Foods is also looking at increasing its stake in the new fast food player Snag Stand.

It currently has five corporate-owned Snag Stand stores and one franchise store in Australia.

Shares in Collins Foods rose 11.5 cents, or 2.4 per cent, to $4.905 at 1030 AEST.

KFC OWNER RETURNS TO PROFIT

* Net profit $29.1m vs $10.4m loss

* Revenue up 0.47pct to $574.3m

* Final dividend up 1.5 cents to 8.0 cents, fully franked