Soul Pattinson takes $10m share in RFG

By Sarah Stowe | 13 Nov 2020 View comments

Retail Food Group has a new shareholder. We all know Soul Pattinson as an Aussie pharmacy icon but Washington H. Soul Pattinson moved beyond its pharmaceutical origins and has been an investment firm since 1903.

Boasting it has never failed to pay a dividend, it has just put its faith in Retail Food Group, purchasing a 6.5 per cent share with a $10m investment in the multi-branded franchise business.

Earlier this year Retail Food Group’s FY20 figures reveal the multi-brand franchisor achieved an EBITDA of $35.5m, a drop of 19 per cent from the $44m in 2019.

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.

It’s been a turbulent few years for the parent company of some of Australia’s best known food franchises: Brumby’s, Crust Gourmet Pizza, Donut King, Gloria Jean’s Coffees, Michel’s Patisserie.

RFG has weathered many challenges including major financial loss amid allegations of misleading conduct and a tough consumer market; internal reviews and structural overhauls; the departure of top management; and the spotlight of a parliamentary inquiry into franchising which grilled former executives on franchise failure and singled out the company for criticism.

The business has made headway under the guidance of turnaround expert Peter George, who was appointed in 2016 to the chairman’s role and implemented a recapitalisation plan.