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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.
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