Retail Food Group cops a grilling

GLORIA Jean’s and Donut King owner Retail Food Group faces a potential class action over the timing of its recent profit warning.

The possible legal action comes as the ASX has asked the company when it first became aware of the information that led to its December 19 forecast of a decline in halfyear profit.

Law firm Bannister Law says it is investigating whether RFG shareholders have grounds to launch a class action over the timing of the forecast.

RFG’s shares dived 25 per cent on Tuesday after it said it expects to make a net profit of $22 million in the six months to December, down 34 per cent on the same period a year earlier. In its written query to RFG, ASX noted that the company had reaffirmed its forecast of growth in annual underlying profit of about 6 per cent on December 7.

“When did RFG first become aware of the revised halfyear guidance?” the ASX asked.

In its written response, RFG said it did not issue revised guidance, because it had never provided a half-year profit forecast, only a full-year forecast. It said the company’s executives received November accounts on December 16 and worked into the early hours of December 19 before issuing the warning just before the share market opened.

“RFG has acted promptly and without delay,” it said.

OUTLOOK GOOD: Dulux Group managing director Patrick Houlihan says the only chips in the company’s financial paintwork occurred in China and the company forecast was otherwise solid.