Feb. 28 - Leading Australian retail food brand manager and franchisor Retail Food Group Limited (RFG) today announced a 1H08 NPAT of $8.1 million, representing a 107% increase on the $3.9 million result for 1H07. The NPAT performance underpinned an 85% increase in EPS over the previous corresponding period (pcp) to 10.2 cents.
The significant NPAT increase was attributable to the Company’s recent acquisitions of the Brumby’s Bakeries and Michel’s Patisserie franchise systems together with robust organic new outlet openings and sustained performance in outlet Average Weekly Sales and Average Transaction Values across each of the Company’s Donut King, bb’s café, Brumby’s and Michel’s franchise systems.
EBIT for the 6 month period amounted to $16 million representing a 154% increase on the $6.3 million achieved in 1H07.
In view of the Company’s strong year to date performance, RFG today announced a fully franked interim dividend of 4 cents per share to be paid on 11th April 2008 with a record date of 4th April 2008. The dividend will also constitute an eligible dividend for the purposes of the Company’s Dividend Reinvestment Plan.
RFG Chairman John Cowley said, “the Company delivered an outstanding half year result during a period in which management resources were also invested in attending the Brumby’s Bakeries and Michel’s Patisserie acquisitions and their subsequent integration”.
“The Brumby’s system was seamlessly integrated within a five month period allowing management to concentrate on the assimilation of the Michel’s Patisserie system. As a result we remain confident of meeting the full year earnings guidance previously provided to the market”, Mr. Cowley said.
RFG CEO Tony Alford said, “the execution of the strategic growth drivers reinforces the Company’s “strength in brands” philosophy, and as a consequence of focused and disciplined development strategies, these financial and commercial outcomes have once again driven performance to record levels”.
“Not only have these growth strategies fortified the Company’s present and future earnings potential by diversifying revenue streams and providing security against the well documented day to day challenges of operating within competitive retail markets, they also provide further scaleable opportunity in all aspects of the Company’s business, its franchise systems and its franchisees.” “RFG is now an infinitely more robust and resilient organisation - in terms of security, returns and growth potential - than the entity which made its initial public offer less than two years ago”, Mr Alford said.
Each of the Company’s four retail food franchising systems performed strongly in achieving combined total network sales of $306 million, a 287% increase over pcp. The substantial increase in network sales was not only a consequence of a record 41 new outlet commissionings and the positive impact of two newly acquired systems - importantly, the existing Donut King and bb’s café systems recorded a combined network sales increase of 21% over the pcp.
Mr. Alford stated that “the exceptional results achieved by the Company in every reporting period subsequent to the IPO are testimony to the robustness of the business model, and to the loyal, focused and disciplined staff and Franchisees”.
“Nowhere is this more evident than in the past 6 months where record earnings have been underpinned by strong organic outlet growth, increases in AWS, full commissioning of the Central Manufacturing and the Coffee Roasting facilities - all whilst completing the acquisition of 2 further franchise systems which collectively contributed 663 outlets” he said.
Mr. Alford further stated “RFG will continue to drive growth in terms of both average weekly sales and average transaction values amongst each of its systems, whilst maximising the efficiencies, synergies and opportunities originating from the Company’s recent acquisitions and their integration within the RFG management umbrella”.
“The Company’s franchise systems and the particular retail food sectors in which they operate have historically been resilient to changing market forces including consumer discretionary spending patterns. Consequently, we remain well positioned to deliver upon RFG’s full year guidance of a record annualised EBIT of $32 million and EPS of no less than 15.75 cents”, he said.
ABOUT RFG:
RFG is a leading Australian retail food brand manager and franchisor. It is the franchisor and intellectual property owner of the Donut King, Brumby’s Bakeries, Michel’s Patisserie and bb’s café franchise systems.
As at 31 December 2007, there was a total of 4 franchise systems and 1051 franchised outlets under RFG’s stewardship comprising:
