RFG HITS MILESTONE DESPITE SHARE SLUMP

WHEN Retail Food Group (ASX:RFG) first listed on the ASX in 2006 it had around 300 outlets.  A decade later and the Gold Coast-based multi-food franchisor has 2500 outlets in its portfolio, spanning across Australia and the globe.

And although the share price has nearly halved since this time last year, RFG managing director Tony Alford (pictured) says the company is delivering record shareholder value.

The company's shares are currently trading just above $4, down from a high of $8 reached in March last year which briefly put the company's market value above $1 billion. The company is now worth $687 million.

"Recent instability amongst global share markets has been well publicised and, unfortunately, RFG's share price performance has not been immune to these challenges," says Alford.

"The share price movement is inconsistent with the company's outstanding performance over the last two years where RFG has enjoyed NPAT growth of 56 per cent.

"Indeed, since listing in 2006, RFG has demonstrated the strength of its unique business model by delivering shareholders record outcomes in each and every year.

"The underlying fundamentals and prospects of the business have been significantly enhanced as a consequence of the strategic acquisition presided over during FY15 combined with the continued organic development of the company's business drivers."

RFG posted a bottom line profit of $55.1 million in FY15, an increase of 49.3 per cent on the previous year's results.  

EBITDA sat at $88.8 million, up 50.2 per cent on FY14, while revenue grew 63 per cent to $210.4 million.

Alford says 2016 represents a year of growth, with the company committed to expanding both domestic and international franchise and wholesale coffee operations.

"The company's international footprint of outlets has increased by 552 over the last 12 months to 687 outlets, and in the present financial year we have budgeted for 130 new international outlet commissionings," says Alford.

The company is currently pursuing further partnership opportunities in key areas including India, Asia, Eastern Europe, the UK and US.

"There is no doubt that the company's growing international operations and diversification of revenue will positively impact RFG's financial performance and therefore deliver positive outcomes for shareholders," says Alford.

Most recently, RFG celebrated the opening of its 2500 outlet, with the launch of Michel's Patisserie and Café in Maitland, NSW.

RFG CEO Franchise Andre Nell says the company's continued network expansion is being driven by high demand for innovative retail concepts in the domestic market, as well as strong international growth.

"Each of our traditional brands - Brumby's Bakery, Michel's Patisserie and Donut King, have developed innovative new retail concepts, focussed on enhancing the customer experience and driving franchisee success," says Nell.

"These new concepts have resulted in an increased appetite for the brands among potential partners looking to invest in a franchised business."

Nell adds that RFG's international operations contributed to and supported the company's growth targets, with highest growth markets including Turkey, Malaysia and China.

"Our master franchise partner for Gloria Jean's Coffees in Turkey is soon to open the 50th outlet in the region, placing Turkey as the fourth largest region for Gloria Jean's Coffees across the globe, behind the US with 60 outlets, UAE with 64 outlets and of course Australia with more than 300," he says.

Gloria Jean's first outlet in Hawaii commenced trading late last year.