Retail Food Group Limited

First-half underlying revenue declined 1%. Domestic network sales were $254.6 million, down 1% on the prior corresponding period, with domestic same-store sales growth of 0.2%. Underlying EBITDA declined 43% to $9.2 million, and statutory NPAT was $2 million versus $7.3 million in the prior corresponding period. At the segment level, CCB same-store sales were down 0.4% and underlying EBITDA fell 47% to $7.5 million, while QSR network sales rose 2.8% and same-store sales grew 1.6%. The group ended the half with $16.7 million of cash, including $11.3 million of restricted cash, and drawn borrowings of $32.5 million under the previous facility. FY26 guidance remains underlying EBITDA of $20 million to $24 million. Management expects gross margin improvement in the second half from the wholesale coffee price increase starting in March, better green bean buying, and improved international coffee trading, plus $1.2 million to $1.8 million of second-half cost savings. The company also said Firehouse Subs remains on track for a fourth-quarter FY26 opening, the Turkiye hub is operational, and company-store cash outflows should ease in the second half as exits and transitions flow through.

Peter George framed the half as mixed: trading was tough, especially in shopping-center-exposed categories, but the business is improving network quality by exiting low-performing stores and focusing resources on core brands. He emphasized a three-pillar transformation program centered on cost rationalization, operational enhancement, and structural alignment, with the aim of delivering material savings and better franchisee support. His tone was constructive and forward-looking, highlighting Firehouse Subs, the Turkiye hub, Beefy's expansion, and Glorange as medium-term growth levers.

Ryan Chellingworth focused on the earnings bridge: lower revenue, pressured gross margins from higher coffee bean costs that the group absorbed to support franchise partners, and lower benefits from lease impairment releases all weighed on results. He pointed to offsetting positives in corporate overhead, where bad debt, insurance, recruitment, and occupancy costs fell, and noted a wholesale coffee price increase from March 2026 should help gross margin in the second half. On capital and liquidity, he cited $16.7 million of cash, $11.3 million of it restricted, $32.5 million of drawn borrowings at half-year end, and a post-period $41.2 million refinancing with WH Soul Pattinson that includes an additional $7.5 million drawdown capacity.

Analysts asked about the bakery division, Firehouse Subs rollout timing, the Glorange refurbishment potential, the size of the international business, and whether the new debt facility would be fully drawn by FY26-end. Management said Brumby’s has been retained as a core brand and will get a strategic update later, Firehouse is likely to reach only around half of the committed 15 stores by end-2027 because of site and supply-chain delays, and the Glorange rollout would likely take 2 to 3 years after proof points are established. They said international currently contributes $2.5 million, about 10% of earnings, with long-term potential to reach around 20%, and confirmed they expect the facility to be fully drawn by the end of FY26.