Retail Food Group downgrades profit guidance again
The Retail Food Group has again downgraded its forecasted first half 2018 financial year profits.
In an ASX update, the Retail Food Group (RFG) said it now expects its net profit after tax for the first half of its 2018 financial year to be less than the AUD $22 million in advised in mid-December 2017.
RFG said it was downgrading its forecast after finalising a new Master Franchise Agreement for Crust and Donut King in the United Kingdom. Due to a variation in commercial terms, revenue from the franchising arrangement will be included in RFG’s full year FY18 results, but not its first half results.
“Accordingly, together with further consideration of additional transactional matters impacting 1H18, RFG now expects its statutory NPAT for 1H18 will be less than the $22.0m advised on 19 December 2017,” RFG said in its guidance update.
RFG had already downgraded its profit forecast in December 2017 after it received negative attention after the publication of a media investigation into its franchising system. The investigation made a number of claims including that Australian RFG franchise partners have felt forced to sell their stores at large discounts and have been underpaying employees to help make ends meet.
RFG owns the franchising rights to a number of quick service food brands in Australia including Gloria Jeans, Crust Pizza, Donut King and Michelle’s Patisserie.
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