KFC UK & Ireland, the fast food chain, has reported a decline in pre-tax profit for the year to 2 December 2012, from £47.2m to £39.1m, against a 7.4% rise in sales to £423.3m.
The c850-strong group, which is led by Martin Shuker, saw operating profit fall from £50.1m to £42.9m on the back of an increase in administrative expenses of £22.4m to £165.6m.
The chain, which is looking to open 50 sites a year as it targets a 1,200-strong UK estate, said that trading conditions remain challenging however it continued to invest in new openings as well as its existing estate.
The company said: “Against the tough macro-economic climate we have continued to develop our new products and new sales layers including non-fried, whilst strong advertising and continuing investment in enhancing and maintaining our restaurant estate have helped deliver a 7.4% increase in sales.”
Despite the global increase in food commodity prices the company saw a decrease in cost of sales to 51.5% (2011: 52.3%).
Of the group’s earnings, £388.3m comes from company-run sites with c£35m derived from franchised sites.
The company believes there is ample scope to develop a further 400 locations in the UK & Ireland “thanks to the strength of the brand and the differentiated consumer offer”.
Earlier this year, the chain set out plans to create 1,600 new jobs, investing £40m to open more than 40 new restaurants and spending the same amount to give 160 outlets a facelift this year.
The chain, which currently employs about 24,000 people, has been adding at least 30 new restaurants in the UK a year and says it has seen seven years of same-store sales growth in a row.
