RFG hits EBITDA of $35.5m
Retail Food Group’s FY20 figures reveal the multi-brand franchisors has hit EBITDA of $35.5 million which is a drop of 19 per cent from last year’s $44m.
However, this year’s statutory net loss of $4m loss is a massive improvement on 2019’s $142.5m loss. The news is positive for net debt too; this has dropped significantly from $259.7m to $33.1m.
RFG chairman Peter George admitted a substantial part of the group’s growth was reached before the effects of the pandemic were felt across the hospitality brands.
“[In the first half] RFG made significant progress in connection with the various turnaround initiatives implemented to stabilise business performance and establish a firm platform for a return to future profitability and growth,” George said.
“The subsequent emergence of Covid-19 caused significant disruption, influencing performance in all aspects of group operations.”
Many of the group’s household name hospitality brands operate in shopping centres. These were particularly hard hit by falling customer numbers which at one stage dropped by 50 per cent. The impact of Covid-19 forced the temporary closure of about 100 stores.
“International network and Di Bella Coffee performance was similarly impacted by a high number of store and independent cafe customer closures or restricted trading conditions,” George said.
RFG restructuring to boost franchisee performance
RFG has restructured elements of the business including new retail management and brand management teams focused on achieving positive franchisee outcomes and improving franchisee relationships.
All franchise facing functions were consolidated under a dedicated retail division more recently redefined as Iconic Co.
This new division will redefine each brand’s strategic direction and development under the leadership of industry veterans, George said.
Jessica Buchanan heads up retail, Damian Zammit leads operations, and Matthew Marshall is head of growth.
George said there will need to be a continued focus on effectively supporting franchisees.
“The maxim that our franchisees’ success is our success has never been more meaningful or appropriate than during the past six months,” he said.
A new field service support model is designed to drive specialisation across key operational functions, increase revenue by boosting franchisees’ retail skills and maximise franchisee ROI.
An ongoing focus on COGS improvement for franchisees has included a.15-20 per cent reduction in wholesale coffee pricing for domestic franchisees, annualised flour range savings of more than $500,000 for Brumby’s Bakery franchisees, and cost reductions across the QSR Division core ingredient range.
More than 400 stores secured Covid-related rent relief this year too.
George said “Whilst we are cognisant of the extremely challenging conditions in which the Group’s businesses operate, we are buoyed by the significant progress made in RFG’s turnaround journey to date, are steadfastly committed to driving positive outcomes for all stakeholders, and approach the future with confidence.”