AUS
NZ
UK
CA
USA
IND
Highlights
- Retail Food Group (ASX:RFG) reports a strong $66.5 million in revenue for H1 FY25, marking a 24.7% increase.
- New store openings, acquisitions, and the Firehouse Subs agreement fuel future growth.
- Strong cash reserves and a strategic focus on network quality improvement.
Retail Food Group (ASX:RFG) has posted a strong financial performance for the first half of FY25, reporting $66.5 million in underlying revenue. This represents an impressive 24.7% growth compared to the same period last year. The company's underlying EBITDA also increased, reaching $16 million, a 4.2% rise from the prior corresponding period.
The multi-brand food franchise operator, known for managing popular brands like Gloria Jean’s, Donut King, Brumby’s, and Beefy’s Pies, has attributed part of its revenue growth to the full six-month contribution from Beefy’s Pies. The bakery chain, acquired in late 2023 for $10 million, added $10.2 million to Retail Food Group’s earnings during this period.
Strengthening Domestic Network Sales
Retail Food Group saw a 3.2% increase in sales across its domestic network, despite challenging economic conditions. The company's coffee, café, and bakery brands performed steadily, with Beefy’s Pies playing a crucial role in stabilizing revenues within the quick-service restaurant (QSR) segment.
During this period, Retail Food Group strategically opened 25 new outlets across its core brands while closing 17 lower-performing stores. The newly launched locations demonstrated strong market demand, with average weekly sales exceeding those of the closed outlets by 35%. Additionally, the December acquisition of CIBO Espresso is expected to bring an extra 22 outlets into the company’s portfolio during the second half of FY25.
Financial Strength and Expansion Plans
By the end of December, Retail Food Group held cash reserves of $21.4 million, with unrestricted cash on hand of $17.7 million. The company reported net debt of $7.1 million while maintaining access to an additional $15 million in undrawn facilities.
Retail Food Group continues to invest in enhancing its retail systems and optimizing its network while pursuing both short-term and long-term expansion strategies.
Firehouse Subs: A Game-Changer for Australian Market
In a significant development, Retail Food Group has signed a 20-year agreement with Restaurant Brands International (NYSE:QSR) to introduce the Firehouse Subs brand to the Australian market. This North American sandwich chain, which boasts over 1,300 outlets, is set to make its debut in southeast Queensland later this year.
Retail Food Group plans to roll out 165 Firehouse Subs locations across Australia within the next decade. The company identified the Australian sandwich sector, currently valued at over $1.7 billion, as a key growth opportunity, especially given the limited competition among national chains.
Firehouse Subs is expected to become a cornerstone of Retail Food Group’s expansion strategy, aligning with its focus on high-quality food and excellent customer experiences. With this latest move, the company is positioning itself for sustained long-term growth while diversifying its brand portfolio.
