Retail Food Group expects around $35m in earnings for FY2020
415 outlets are also receiving rent concessions.
Retail Food Group (RFG) has updated its earnings guidance, now estimating underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be around $35 million for the 2020 financial year.
The figure is less than the franchisor’s previous guidance of $42 million to $46 million, which was withdrawn late March as pandemic-related lockdown measures started affecting retail and hospitality businesses.
The revised EBITDA excludes the impact of new Australian Accounting Standards Board (AASB) 15 and 16 reporting guidelines, which is expected to adjust the company's revenue and leasing numbers.
RFG, which owns the Donut King, Gloria Jean’s Coffees and Michel’s Patisserie franchise brands, also advised in its trading update that net debt at the end of June will be around $25 million.
The company reported it continued to observe an increase in customers returning to its shopfronts amidst the easing of restrictions due to COVID-19.
"Customer count has continued to improve, with recent trading data reflecting a weighted average decline amongst all brands of 13.76 per cent versus the previous corresponding period," RFG executive chairman Peter George said.
"RFG expects trading conditions to remain challenging in the foreseeable term and therefore anticipates a continuation of those measures implemented by the group in response to the pandemic to support franchisees.”
The group has permanently closed seven local outlets, explaining that these were already forecasted to close, with COVID-19 having “simply expedited” the process. Only ten 10 outlets remain temporarily closed in their domestic store network.
Internationally, some 30 international outlets have also closed permanently. Whilst over 130 other outlets are still shuttered, approximately 380 have at least partially reopened.
RFG also centralised its domestic coffee roasting operations and restructured its wholesale coffee business, with annualised cost savings of $6 million.
415 outlets are also receiving rent concessions.
