Retail Food Group’s first-half profit up 31.4%
The group saw higher average spend and its international business bouncing back.
Retail Food Group saw net profit after tax rise 31.4% to $5.1 million during the first half of its financial year, seeing growth in average transaction value and outperforming Gloria Jean’s drive thru outlets.
The result was underpinned by statutory earnings before interest, taxes, depreciation, and amortization (EBITDA) of $11.8 million, slightly down from last year’s $12.2 million.
On an underlying basis, EBITDA declined to $9.3 million, translating to underlying NPAT of $7.4 million.
RFG executive chairman described the company’s performance as a “reasonable one”, citing the result did not cycle $3.7 million in JobKeeper support received in the prior corresponding period, along with “sustained and unavoidable” impact of COVID-19 across the group’s operations.
“1H22 was a challenging period for the Group, its franchise partners and customers, and was essentially bookended by the Delta and Omicron waves”, he said in a statement.
“The full impact of Delta induced lockdowns, border closures, vaccine mandates and other trading restrictions took effect during Q1, particularly in NSW, Victoria and the ACT which endured extensive and sustained lockdowns. Subsequent emergence of the Omicron wave and resulting close contact isolation requirements further influenced consumer shopping habits and operational effectiveness, including lost trading days or hours for many outlets.”
“This was particularly the case amongst the Company’s coffee-based Brand Systems which were predominantly based in shopping centres or metro locations, where worsening customer count declines were increasingly evident”, he added.
George also noted positive indicators observed across RFG’s business which “provide confidence regarding improved future outcomes” such as average transaction value growing 7.4% across the domestic network and its QSR Division, which enjoyed a 6.8% rise in same store sales.
“The value models successfully introduced to the Crust and Pizza Capers networks during FY21 continue to resonate with customers and have been complemented by the introduction of compelling new products such as Crust’s first ever plant-based protein range,” George said.
Gloria Jean’s drive thru outlets “continued to outperform”, RFG said, with 11.6% same store sales growth.
The company said 20 potential new franchise partner candidates have passed their initial review and approval stage and more than 50 pending further vetting.
Its Donut King business is also set to imminently launch a new ‘mini kiosk’ concept geared for access to non-traditional site locations whilst Gloria Jean’s will have a “Drive Thru container model” anticipated to be established in Southeast Queensland later in the year.
Internationally, master franchise partners saw underlying EBITDA grow over 200% to $1.5 million from $400,000 in the prior comparative period. More than 50 outlets across 16 countries are currently set for launch in the second half.
“When coupled with the recent establishment of a supply-chain solution for the Donut King brand that will enable entry into the Middle East, North African and Central European markets, the Company continues to maintain considerable optimism regarding the potential contribution of international operations to RFG’s future success”, George said.
As at 31 December 2021, international operations consisted of 570 outlets across 55 licensed territories in 42 countries.
