Hard-hit Retail Food Group in trading warning
Banks told to reconnect with customers
RETAIL Food Group has issued a profit warning following attacks on the viability and ethics of its franchise model that have contributed to a collapse in its share price.
The embattled food franchise company has also revealed it is in talks with its lenders over the rollover of its $150 million debt facility.
The group, which owns retail brands including Donut King, Brumby’s Bakery, Michel’s Patisserie, Gloria Jean’s and Crust Gourmet Pizza, cited “adverse publicity” among the reasons.
After a week in which the company’s shares collapsed by one-third, investors were hit with more downbeat revelations yesterday when the group said it expected a decline of almost 30 per cent in net profit for the six months to December compared with the same period last year. In the six months to December last year, its net profit was $33.5 million. THE finance industry must “radically rethink” its relationships with customers, communities and governments, according to ANZ chief Shayne Elliott.
Speaking at the group’s annual meeting yesterday, Mr Elliott said the banking industry was paying a heavy price after falling out of favour with the public.
“The breakdown in these relationships has driven higher capital, tighter liquidity requirements, and now a new bank tax,” Mr Elliott said.
Left unmanaged, those changes could reduce the industry’s return on equity — a key measure of profitability — by about 3 per cent and result in lower shareholder dividends, he said.
“We need a strong and inclusive conversation about how we adapt, embrace opportunity and continue to prosper for the benefit of all members of our society,” Mr Elliott said.
ANZ chairman David Gonski said he regretted that public concern about big banks’ behaviour was allowed to escalate to the point that a royal commission became necessary to restore confidence in the industry.
The bank had previously believed a royal commission was unnecessary, Mr Gonski said.
But political debate over the industry’s misconduct had a negative impact on confidence in the financial system and the economy, he said, speaking at the meeting in Sydney.