RFG expansion pays off

Overseas growth boosts franchisor’s bottom line

RETAIL Food Group’s overseas expansion is reaping rewards for the Gold Coastbased food and beverage franchisor with the company banking on more growth to come.

The owner of Gloria Jean’s, Donut King and Crust made a net profit of $61.9 million in the year to June 30, up 17 per cent from the prior year.

But the 14 per cent rise in underlying profit to $75.7 million was below guidance given in June of 15 per cent growth after delays on some international licences.

Retail Food Group has now expanded five of its brands – Gloria Jean’s, Donut King, It’s A Grind Coffee House, Pizza Capers and Brumby’s Bakery – into new markets.

This includes Pizza Capers in India, Donut King in Sweden and Myanmar and Gloria Jeans in 10 new territories, including the UK, Kenya and a Chicago outlet in the United States.

The group now operates in 81 territories, an increase of 17 per cent on a year ago.

Pre-tax earnings from its international franchises surged 8.9 per cent to $15.3 million while the EBITDA contribution from its domestic franchises fell 0.8 per cent to $53.7 million.

Managing director Andre Nell said the group’s domestic business, which makes up 43 per cent of earnings, has matured with steady earnings growth while its international network, which makes 13 per cent of earnings, has boosted revenue streams.

“Gloria Jean’s is most wellknown globally and we are starting to get more traction for some of our other brands overseas now,” Mr Nell said.

The group’s acquisition of food distribution business Hudson Pacific Corporation just over a year ago has led to it creating a commercial division which has contributed $11.8 million in underlying earnings.

Underlying earnings in RFG’s franchise division improved by 1.5 per cent on the previous year, supported by the performance of coffee retail businesses.