The company says it is seeing early signs of stabilisation.
Retail Food Group (RFG) reported underlying net profit after tax of $15.4m, more than 50% lower compared to FY18's $33.3m.
RFG reported a statutory net loss after tax of $149.3m, an improvement of 51.3% on PCP which includes $185.2m in non-cash impairments, provisioning and restructuring costs.
The company stated that despite "challenging conditions in retail and adverse sentiments around the franchising industry", the company seeing early signs of stabilisation.
RFG said in the report that new product innovation and marketing strategy they have implemented in 2019 “are proving very positive with momentum building” as FY20 approaches.
In 2019, RFG has partnered with brands such as Nestle and celebrity media ambassadors such as Matt Sinclair from MasterChef. RFG reported that some of these initial marketing initiatives have reached between 6 to 12 million customers per campaign.
A new product and marketing strategy that will deliver 62 new campaigns was also established in 2019 and will be rolled out by the company for its franchisees over the next 12-18 months,
“Whilst the rollout of this new program remains in its infancy, its recent launch via nine bespoke new product campaigns has so far generated annualised incremental network revenue growth of over $5m. This is a very positive indicator of the potential impact of these new initiatives which we expect will materialise throughout FY20,” RFG executive chairman Peter George said.
A range of initiatives to improve franchisee profitability and support were also implemented throughout FY19.
George said in the report that the company is still focused on stabilising RFG’s business through “better serving our franchise partners, fostering a stronger customer focused ethos, reducing debt, and improving the company’s business units”.
The company is also implementing a six-point plan that includes refocusing on its retail food and coffee operations and redesigning organisational structure to refocus on its brand, franchisees and customers.
“Management is focused on implementing the Group’s Six Point Plan to return RFG to a stable and growing organisation which will see its franchisees given the best possible opportunity to thrive,” George said.
“RFG is making solid progress in the execution of its Six Point Plan and expects to see stabilisation and future growth through the strategic initiatives underway. The new management team is rebuilding the culture of RFG and will continue to strengthen our franchisee-first focus and position the Group for growth in the medium term,” he added.
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