New chief to lead RFG turnaround

NEW Retail Food Group chairman Stephen Lonie won’t stray from the turnaround strategy unveiled after the food franchisor released its disastrous full-year results.

Yesterday, RFG said Mr Lonie would replace Colin Archer as chairman of the struggling Donut King owner, which has seen its share price plummet and market capitalisation slashed in the wake of allegations of poor treatment of franchisees.

RFG’s brands include Pizza Capers, Brumby’s Bakery and Crust Gourmet Pizza Bar.

Mr Archer, who will also retire as a director of RFG, first joined the board a decade ago.

He said now was the “appropriate” time to step down following the release of the FY18 results, which revealed a massive $306.7 million loss – much worse than the $87.6 million loss the company had previously flagged.

Mr Archer said the timing also enabled time for a handover period prior to the annual meeting. He had previously announced his intention to retire at last year’s annual meeting.

Mr Lonie said he has no plans to alter the turnaround strategy outlined by CEO Richard Hinson when it de- livered its full-year results. That strategy includes a threepronged approach to execute a 12 to 18-month turnaround comprising stabilising the business and returning it to a profitable platform, optimising operations and enhancing profitability and returns for RFG and franchisees, and reinvesting to grow the business.

“The turnaround strategy outlined by Richard Hinson at our recent end-of-year results presentation remains on track,” Mr Lonie said in a statement to the Bulletin.

“I will continue to work with the board, Mr Hinson and management on implementing the key activities embedded in our turnaround plan to achieve our objectives over the next 12-18 months, particularly supporting our franchisees in a continuing tough retail market, with our primary focus on continuing to improve the sustainability of our franchisees.”

Mr Lonie said the key to restoring shareholder value was by “focusing on the performance and sustainability of our franchisees” and exploring options to cut debt.

Mr Lonie, who has been on the board for the past five years, is a chartered accountant and director of listed companies MyState Limited, Corporate Travel Management Limited, and Apollo Tourism & Leisure Limited.

He is also chair of RFG’s audit and risk management committee and a member of the nominations and remuneration committees.

Mr Archer said he was satisfied that, with the executive and board changes, the company was in a position to carry out its turnaround strategies.

“Mr Hinson in particular has reinvigorated the company with enthusiasm, commitment, and his industry knowledge,” he said.

“Stephen Lonie is a highly respected and experienced chairman who has been instrumental in developing and implementing the turnaround strategies adopted by RFG.

“He has a range of relevant professional, business and corporate governance experience including specialist expertise in the agribusiness/food, business and financial services industries.”

Mr Lonie said he “fully appreciates” the challenges the company faces, which include restoring value to shareholders, who have seen the share price plummet to record lows.

RFG also yesterday announced the appointment of two new non-executive board members comprising David Grant and Peter George.

Shares closed yesterday up half-a-cent to 50¢.