Retail Food Group sinks to record low as it downgrades earnings
Embattled franchise chain Retail Food Group's share price has dived to a record low after it flagged a significant statutory loss this financial year.
Shares in the company, which controls major brands such as Gloria Jeans, Crust Pizza, Brumbies Bakeries and Donut King, were down more than 6 per cent to 72.5¢ in early trade after the company said it expected underlying net profit after tax of about $34.5 million for the year to June 30.
That figure would sink to an $87.6 million loss after tax on a statutory basis once writedowns were taken into account.
RFG has been under pressure since Fairfax Media revealed many franchisees operating under its umbrella were struggling to stay afloat.
The company previously downgraded its half-year earnings on several occasions, before in February unveiling a $24.7 million underlying net profit after tax for the six months to December 31, which it described as "disappointing".
At the time, the company did not provide guidance for its full-year profit but on Tuesday said it still faced a number of challenges.
"Trading performance has continued to be impacted by a combination of previously noted persistent difficult retail market conditions, the cumulative impact of planned domestic outlet closures, and ongoing negative sentiment regarding both retail franchising and RFG in particular," the company said in a statement to the ASX.
Last week, RFG announced chief executive Andre Nell would leave the company and on Tuesday said his severance had contributed to the final profit figure.
The company said it was in continuing discussions with its banks.
More to come