Retail Food Group shares kick up as people return to food courts
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Shares in Retail Food Group (ASX:RFG) climbed nearly 30 per cent this morning after it told shareholders customers were returning to shopping centres.
The fast food franchisee said in the week ending June 21 it only saw a weighted average decline among all brands of 13.76 per cent compared to the prior corresponding period.
While this is still below pre-COVID highs it indicates the increase in activity with more people again heading to shopping centres and food courts.
Retail Food Group expects to book earnings of $35m for the full financial year.
Shares rallied 28 per cent to an intra-day high of 7.8c before edging back to 7.3c.
Retail Food Group, however, still warned shareholders it would be a long time before there would be any sort of return to the norm.
“RFG expects trading conditions to remain challenging in the foreseeable term and therefore anticipates a continuation of those measures implemented by the group in response to the pandemic to support franchisees,” chairman Peter George said.
However, similar to its shopping centre neighbours it sought rental relief with landlords and had a high degree of success. Concessions have been obtained in over 400 outlets globally to date and the company is negotiating more.
“This is a positive outcome for both franchisees and RFG which provides both cash-flow support and added certainty,” George said.
“Negotiations with landlords regarding relief arrangements are ongoing and are anticipated to persist for the duration of the pandemic and a reasonable recovery period thereafter.”
Furthermore, despite many being forced to operate in a “take away only” mode, only 17 outlets in Australia temporarily closed and only seven will be permanent.
George said these had been forecast to close pre-pandemic and COVID merely sped up the process.
Retail Food Group said it was closely monitoring the situation in Victoria with the possibility of a re-introduction of restrictions.