Donut King and Gloria Jean’s owner Retail Food Group is in a trading halt
Food & Agriculture
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Retail Food Group, which runs some of Australia’s best known fast food brands, has gone into a trading halt while it prepares bad news about its financial results.
The company, owner of Brumby’s, Donut King, Crust Gourmet Pizzas, Michel’s Patisserie and Gloria Jean’s, expects its profit for the first half of 2018 to be “materially less” than the same six months the year before.
The company (ASX:RFG) says the results can only be finalised when it gets the auditor’s report due this Friday.
Retail Food Group last month issued another profit downgrade, saying its half-year would be about $22 million, not $33.5 million as previously forecast.
The company then said negative media coverage about franchising and the company contributed to a noticeable decline in momentum in new and renewing franchise sales.
A Fairfax Media investigation had revealed hundreds of stores were going to the wall as “a result of a brutal business model”.
The company says it has no evidence of franchisees under-paying staff.
At last report, the company was negotiating with its lenders to rollover its three-year loan facilities of $150 million, maturing in December 2018.
The company’s shares last traded at $2.04, down from a 12-month high of $5.73.