Retail Food Group reports $111m half-year loss
The company laid out a six-point plan in a bid to stabilise the business.
Retail Food Group (RFG) has reported to an $111 million first half loss, citing the cumulative impact of ongoing difficult retail trading conditions, outlet closures, investment in restructuring activity, prevailing negative sentiment regards franchising, and others. The latest loss followed an $87.8 million loss in previous corresponding period and a $307 million bottom-line loss in 2018.
For the half-year period, the company that owns Gloria Jean's Coffee, Donut King, Michel's Patisserie and other brands has reported revenue of $192.0 million, 1.8% lower than the year-ago period. Underlying NPAT was $6.6 million, 73.4% lower than last year's.
During the period, the company implemented major restructuring and cost reduction initiatives across the Group. The company expects that the restructuring will deliver around $20m in annualized cost savings.
Company executive chairman Peter George said the half-year results show that the company has gone some way towards clearing the decks and stabilizing the performance of its continuing operations, and stressed that "a lot of work remains to be done to resurrect the financial health and performance of the business."
RFG also listed a six-point plan that aims to stabilise the business, reduce debt and improve operations across its business units. The plan includes refocusing the group on its core retail food franchise and coffee supply operations and divesting or discontinuing non-core underperforming businesses, strengthening the balance sheet to improve financial stability and right-sizing shared services resourcing and implementing initiatives to consolidate supply chains for more efficient businesses.
“A number of measures have been implemented to support the six-point plan and stabilise RFG’s performance, however, the company anticipates that future results will remain subdued whilst retail market conditions remain challenging and the company executes its restructuring program,” George said.
The company also confirmed that it is in negotiations to sell its Donut King and QSR Division brand systems, but clarified that no formal binding agreement with the proposed buyer has been reached.
RFG is anticipating FY19 underlying EBITDA to be from $43 million to $48 million, assuming "full-year contributions from all business units and the realisation of forecast annualised restructuring benefits."
