RFG’s CEO Vacancy and Market Pressures Pose Challenges Despite Growth

FY25 Performance Amid Economic Headwinds

Retail Food Group Limited (RFG) reported a steady performance in the financial year 2025 despite a challenging macroeconomic environment marked by cost-of-living pressures and shifting consumer priorities. The company’s total network sales edged up slightly to $505.4 million, supported by the resilience of its core brands and a disciplined focus on franchisee success.

Underlying EBITDA rose modestly by 1.7% to $29.6 million, reflecting operational efficiencies and the full-year contribution from the Beefy’s Pies acquisition. However, underlying net profit after tax declined by 16.3%, impacted by higher depreciation, finance costs, and tax expenses.

Strategic Growth and Brand Innovation

RFG’s strategy remains anchored in its 'Enhance and Grow' framework, focusing on strengthening established brands while pursuing new growth avenues. The expansion of Beefy’s Pies and the newly announced partnership with Restaurant Brands International to introduce Firehouse Subs in Australia are central to this growth narrative. Firehouse Subs is expected to open its first store in FY26, with a long-term target of 165 outlets over the next decade.

Meanwhile, the company is refreshing its Gloria Jean’s brand through the innovative Glorange store format, which blends modern aesthetics with the brand’s coffee heritage. Early results from two refurbished sites show significant uplift in sales, signaling strong consumer reception.

Franchisee Partnership and Operational Efficiency

Franchisee success remains at the heart of RFG’s business model. The company has reinstated franchise partner seminars and invested in data-driven platforms to enhance performance tracking and customer engagement. The Multi-Site Operator program continues to yield results, securing a pipeline of 20 new outlets over the next three years.

RFG is also executing a strategic reset of its company store portfolio, transitioning 44% of targeted stores to franchise partners and exiting legacy sites to reduce lease liabilities. This shift supports a capital-light model that balances targeted investment with revenue growth expectations.

Trading Update and Leadership Transition

The first quarter of FY26 shows encouraging momentum, with core brands like Crust and Beefy’s delivering strong same store sales growth of 4.1% and 5.8%, respectively. Overall network same store sales grew by 0.8%, despite a slight decline in total trading outlets due to non-core brand closures.

On the leadership front, Executive Chairman Peter George has resumed the CEO role following Matt Marshall’s resignation in September. The Board is conducting a global search for a new CEO with substantial franchise experience to guide the company’s next phase of growth.

Financial Stability and Outlook

RFG ended FY25 with a stable balance sheet, holding $23.5 million in unrestricted cash against $32.5 million in gross debt, resulting in a manageable net debt position of $9 million. The company remains compliant with debt covenants and maintains a strong franking credit position, supporting future dividend payments.

Looking ahead, RFG’s focus on franchisee support, brand innovation, and strategic growth initiatives positions it well to navigate ongoing market challenges and capitalise on emerging opportunities.