ALFORD QUITS AS RFG BOSS AT TOP OF HIS GAME

ALFORD QUITS AS RFG BOSS AT TOP OF HIS GAME

RETAIL Food Group (ASX:RFG) managing director Tony Alford has stunned the market with the announcement that he is resigning as managing director of one of Australia's largest food franchise operators.

The news comes as the Gold Coast-based company posted another record half-year result, with a net profit of $28.8 million up 34.4 per cent from a year earlier.

Alford (pictured) leaves the helm after 20 years driving the company's growth, including an unbroken succession of record half-year and full-year profit results since the company listed on the ASX in 2006.

Despite this success, the company's share price has faltered over the past year, falling from a high of $8 in March to a low of $4.09 in January. The share fell as low as $4.22, or 4.5 per cent, this morning on news of Alford's departure.

Alford says the decision to hand control to fellow founding executive Andrew Nell was 'not a difficult one', despite his stated passion for the position. He simply cites a desire to leave at the top of his game in a move facilitated by a series of management changes in recent years that have seen the company appoint divisional heads.

"Family, health, personal reasons and new opportunities have played no part in the resolve to retire from the position of managing director," says Alford.

"On the contrary, after 20 years' service, the enthusiasm and energy remains as does the passion and confidence in the future of RFG.

"It is as a direct consequence of the exceptional results which have been achieved after less than one year of the company's previously ventilated three-year plan that the appropriate time to transition stewardship is now."

RFG's profit for the six months to the end of December has been buoyed by contributions from the Gloria Jean's Coffees acquisition in late 2014 as well as the Brisbane-based Di Bella Coffee and the Café2U mobile coffee business.

Underlying revenue surged 90 per cent to $148.3 million, aided to the tune of $71.1 million by these acquisitions.

Revenue also included a $2.5 million contribution from sale of master franchises in New Zealand for Brumby's Bakery, Esquires Coffee Houses, bb's café, The Coffee Guy and Café 2U.

However, three of its older franchises, Donut King, Brumby's and Michel's Patisserie, saw revenue slip $3.3 million, largely because of a drop in trading from corporate stores.

Group EBITDA (earnings before interest, tax, depreciation and amortisation) rose 42.7 per cent to $49.2 million.

RFG boosted outlet numbers by 142 during the half year, up from 75 previously, and that included 73 new international outlets in 41 countries. There were 79 closures during the period for a net gain of 63 outlets.

Incoming CEO Andre Nell, who along with Alford was among six inaugural members of the company's executive team, says he intends to oversee a smooth transition of leadership with a view to building on Alford's growth strategy.

"I have every intention of maintaining that strategy, preserving the performance-based culture inherent in the group and its brand systems, and driving the growth opportunities at RFG's disposal," he says.

Nell will assume the top job on July 1. 

RFG is paying an interim dividend of 13c per share, up from 11.5c previously.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Four ways businesses can use artificial intelligence to triumph in 2022
Partner Content
The last two years have delivered major disruption to the technology industry and broad...
PROS
Advertisement

Related Stories

QLD Premier confirms borders to reopen four days early

QLD Premier confirms borders to reopen four days early

With Queensland health authorities expecting the 80 per cent double...

Cyber weekend sales make November the biggest month in Australian online shopping history

Cyber weekend sales make November the biggest month in Australian online shopping history

November was the biggest month in Australian online shopping histor...

Aussie Broadband launches $344m bid for Over The Wire

Aussie Broadband launches $344m bid for Over The Wire

One of Brisbane’s Top Companies Over The Wire (ASX: OTW) has ...

Afterpay postpones vote on takeover as Square takes on a new name

Afterpay postpones vote on takeover as Square takes on a new name

Delays from the Bank of Spain in approving a multi-billion takeover...