RFG reported record profit of $13.6mn in 1H 2011
The retail food brand manager and franchisor's NPAT surged 9% for the first half of FY 2011 while interim dividend increased by 33% to 7.0 cents per share.
According to RFG, NPAT from Core Operations increased by 12.6% to $14.1 million, consistent with guidance. The group also increased its interim dividend by 33% to 7.0 cents per share.
Increased revenues generated from franchising operations underpinned RFG’s 5th consecutive record first half NPAT. That revenue was augmented by contributions from those franchise systems acquired in 2H10(4), further transitioning of Michel’s Patisserie outlets to the traditional franchise royalty model and increased Average Weekly Sales (AWS) across all networks.
The Board today announced a fully franked interim dividend of 7 cents per share, to be paid on 6 April 2011 following a record date of 23 March 2011.
The dividend reflects a 33.3% increase over 1H10 and will constitute an eligible dividend for the purposes of the Company’s Dividend Reinvestment Plan.
RFG Chairman John Cowley said, “This result is particularly satisfying given difficult retailing conditions which continue to suppress franchisee network sales and organic franchise system expansion”.
“RFG remains acutely focussed on those business drivers which generate maximum return at both corporate and franchisee level. We have a tried and tested platform for further growth and maximisation of shareholder value”, he said.
RFG CEO Tony Alford added that, “total franchisee network sales of $327 million were supported by marketing initiatives which fortified weighted Average Weekly Sales and Average Transaction Values of 2.3% and 2.4% respectively over 1H10”.
“The underlying strength of the Company’s franchise systems manifests itself in strong diverse revenue streams and each remains positioned to increase growth once retail returns to normality”, he said.
New outlet growth of 20, whilst consistent with guidance was restrained by depressed shopping centre development, a tightening of franchisee applicants, and constricted bank lending.
“In 1H11, the optimisation of RFG’s revenue drivers was challenged by depressed shopping centre foot traffic, subdued consumer spending, burdensome labour laws, and more recently the impact of significant environmental events”, Mr Alford said.
RFG recently increased its outlet population growth by acquiring the Esquires Coffee Houses franchise system, contributing a further 46 franchised outlets under the RFG umbrella. Importantly the acquisition facilitates the realignment of bb’s café with a strongly branded system likely to generate additional outlet and sales growth.
“Significantly, the Company refinanced its debt facilities with the National Australia Bank during 1H11. The new three year $95 million facility incorporates considerable flexibility, simple covenants and a very low margin”, Mr Alford said
