The Retail Food Group Limited (ASX: RFG) share price is up more than 5.5% today. At the time of writing, the Retail Food Group share price is up 5.6% to $0.075. Shares in the company are in hot demand after Retail Food released its results for the first half of FY21.
Maintaining a profit despite COVID-19
Earlier today, Retail Food released its results for the first half of FY21.
Despite the impact of the COVID-19 pandemic on retail, Retail Food managed to maintain a profit for the first half.
The company recorded an underlying net profit after tax (NPAT) of $12.0 million. This was a 60% increase on the prior corresponding period (pcp). The result was underpinned by an underlying EBITDA of $14.4 million for the first half of FY21.
However, the true impact of the pandemic was seen in statutory NPAT which fell 72.2% to $3.89 million. In addition, total revenues for Retail Food fell 52.4% to $85.1 million for the first half.
Retail Food acknowledged that the company had received $4 million in Jobkeeper payments and did not declare an interim dividend.
Spotlight on Retail Food divisions
Retail Food noted strong performances for its domestic franchises, Brumby’s Bakery and QSR Division (Crust/Pizza Capers).
For the first half, the company’s Brumby’s Bakery franchises reported an 11.7% increase in sales. In addition, its QSR Division saw sales grow by 6.7% largely due to non-contact meal delivery options.
According to Retail Food, the sales growth partially offset its brands anchored to shopping centres. Overall, Retail Food saw total network sales for Donut King, Michel’s Patisserie, and Gloria Jean’s fall 13.2% to $244 million.
How has the share price responded?
Retail Food is Australia’s largest multi-brand retail food franchise manager. The company is the owner of notable brands including Donut King, Michel’s Patisserie, Gloria Jean’s, Brumby’s Bakery, Crust Gourmet Pizza, and Pizza Capers.
The company acknowledged that the COVID-19 pandemic presents ongoing challenges for the second half of FY21. However, Retail Food management remains optimistic about the return to less volatile trading conditions.
Retail Food also noted that Federal Court proceedings with the Australian Competition and Consumer Commission (ACCC) had begun. However, the company could not determine the full financial impact of the proceedings.
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Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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