RFG boss details vision
Firm has ‘six-point plan’ to improve its fortunes
RETAIL Food Group executive chairman Peter George has hailed the “transformational opportunity” that awaits the company in the wake of its recapitalisation.
Mr George addressed shareholders at the company’s annual meeting yesterday at RACV Royal Pines in Benowa.
Prior to the meeting, RFG spin doctors took the unprecedented step of barring media from the meeting, stating it was “common practice”, even though it has never happened before in the company’s history.
Mr George told shareholders RFG has a “significant opportunity” following its recently executed recapitalisation.
That involved raising $190 million from investors to pay back debt and a deal with financiers to pay back $118.5 million, wipe off $71.8 million worth of debt and provide a new $75.5 million facility through to November, 2022 to refinance the remaining debt.
“I want to again emphasise the transformational opportunity that this recapitalisation has provided for the company,” Mr George said according to a release from the meeting supplied to the ASX.
“The significant opportunity that this affords RFG should not be overlooked.”
Prior to the capital raising RFG had 182 million shares. It now has 1.88 billion.
Mr George said he understood the share issue had been highly dilutionary for original shareholders.
“However, I urge you to focus on the future, as we prepare the company for a new chapter and a fresh start.”
RFG is targeting this financial year underlying pre-tax earnings of between $42 million and $46 million, excluding the impact of new accounting standards.
The company, currently moving its base to the Foxtel tower in Robina, said it is on track to meet this guidance with performance to date in line with budget.
Mr George said despite challenging retail trading conditions and “adverse sentiment around the franchising industry” following a parliamentary inquiry into the sector and media reports of mistreatment of franchisees, the company is showing signs of stabilisation.
He said his vision is for the company, which has seen its reputation battered since reports of mistreatment of its franchisees emerged in 2017, is to become a respected leader in the retail food and beverage sectors. The company, beset by store closures, has a “six-point plan” to turn its fortunes around. That includes focusing on its core retail food and beverage operations and offloading loss-making businesses, including Hudson Pacific, which it yesterday announced it had agreed to sell to its former owners.
The other points refer to strengthening its balance sheet, less reliance on a shared services model for franchisees, realising efficiencies in its supply chain, driving gains for its domestic franchisees through innovation and marketing, leveraging its coffee roasting businesses to service external markets and international expansion.
Shares closed up 4 per cent at 9.8 .