A pot of gold that lies in successfully selling carbs and coffee to more and more Australians has been the speciality of Retail Food Group (RFG) now for some years as it has put together the largest listed cafe and bakery based retailing group in the country.
That chase saw it yesterday report its most successful six months ever for the half year to the end of December with record profits of more than $21 million, a record dividend and a new series of highs for the company’s share price which soared more than 15%.
From donuts, to burgers, break rolls, coffee, tea and pizza, it has a significant and growing share of the carbs and coffee of Australian consumers, especially through outlets across shopping centres large and small.
Its chains include Donut King, Brumby’s Bakery, Crust Gourmet Pizza Bar, Michel’s Patisserie, Gloria Jeans and the Di Bella brand of coffee from Brisbane.
It’s been a successful formula for the company with the shares up more than 20% in the past year as it has spent heavily on expansion, especially in coffee where it has laid out more than $200 million to become the biggest coffee retailer in the country.
In fact the shares hit new all time highs yesterday as they closed up 15.3% at $7.54. That was one of the largest positive reactions to an interim profit report this season.
RFG 1Y – More gold for RFG from Australia’s carbs and coffee orgy
And despite the “continued retail headwinds including sustained poor domestic consumer sentiment levels”, it sees further acquisitions and investment in coffee, fresh from spending $163.2 million on the purchase of Gloria Jean’s Coffees and $47 million buying Di Bella Coffee.
The Di Bella acquisition, its latest, will help boost full-year underlying net profit to $55 million, Retail Food Groups said yesterday as it reported a 24.4% jump in half-year profit to $21.5 million.
RFG said in yesterday’s statement it would “continue to pursue key organic growth platforms of its brand systems, advancing the coffee & allied beverages strategy, and focus on integration and restructuring activities subsequent to the most recent acquisitions, including Di Bella Coffee”.
Earnings before interest, tax, depreciation and amortisation were up 22.5% to $34.5 million.
The company has 2476 outlets across 45 international territories, and is divided into franchising operations and a wholesale/retail arm.
"The group continues to investigate and evaluate potential retail food franchise systems and other complementary asset acquisitions," it said.
