Retail Food Group issues second profit warning in a month

Michel's PatisserieRetail Food Group Limited (RFG) has warned it expects statutory net profit after tax for its first half to be less than the already downgraded $22m it advised in December last year.

In a market update, the retailer – which owns several food and beverage chains including Michel’s Patisserie and Glorai Jeans – said it had also concluded new Master Franchise Agreements for the United Kingdom in connection with the Crust Gourmet Pizza and Donut King brands.

The retailer’s already struggling shares have fallen another six per cent in early trade after the cafe and bakery owner issued its second profit warning in less than a month.

RFG’s shares have fallen almost 50 per cent since media reports in November accused the company of oppressive business practices, including exorbitant fees and a lack of support for franchisees.

“Each of the UK licences are effective December 2017, however, given recent variation to an element of the commercial terms thereof, the revenue derived from these transactions will now be included in RFG’s full year results for FY18,” the retailer stated.

“Accordingly, together with further consideration of additional transactional matters impacting 1H18, RFG now expects its statutory NPAT for 1H18 will be less than the $22.0m advised on 19 December 2017.

“RFG’s financial results for 1H18 are still in preparation and will be released once RFG’s financial statements for the period have been finalised.

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