10 July 2008 - Leading Australian retail food brand manager and franchisor Retail Food Group Limited (RFG) today announced that, based on unaudited management accounts, the Company's net profit after tax (NPAT) for the financial year ended 30th June 2008 will exceed the NPAT result achieved for the FY2007 corresponding period by at least 116%.
RFG’s NPAT for FY2008 is likely to be within the range of $16.3million to $16.8million compared to FY2007 NPAT of $7.52million, representing a minimum increase of $8.78million.
The Company’s performance will result in a minimum Basic EPS (earnings per share) of 18.4cents, which represents:
• an increase of 75% (or 7.9cps) on the FY2007 result of 10.5cps; and
• a 17% increase on February 2008 guidance of 15.75cps.
The substantial increase in EPS over FY2007 is largely attributable to RFG’s acquisition of the Brumby’s Bakeries and Michel’s Patisserie franchise systems in 1HFY2008. Increases in total franchise network revenues, due to solid new outlet growth and average weekly sales growth across each of the Company’s Donut King, bb’s café, Michel’s Patisserie and Brumby’s Bakeries franchise systems, has also contributed to the FY2008 result.
CEO Tony Alford said that, “the business operations of RFG and its franchise systems performed strongly throughout the financial year notwithstanding the well founded and highly publicised commentary regarding continued deterioration in discretionary spending and depressed consumer sentiment”.
“Whereas retailing is either a beneficiary or casualty of changes in general economic conditions, RFG’s franchise systems and business drivers are positioned such that historically they have been largely insulated from, and resilient to, the at times violent movement in retail spending,” Mr Alford said.
Results for FY2008 will be announced to the market in August 2008 when RFG’s Preliminary Final Report is published and at which time further commentary will be provided with respect to operational performance.