The Retail Food Group Limited (ASX: RFG) share price has fallen 6.4% after delivering a FY18 profit guidance update to investors.
Retail Food Group is the master franchisor behind food and coffee chains like Gloria Jeans, Brumby’s, Cafe2U and Donut King.
The company has been going through a rough time with franchisees complaining of high fees and low profits.
Retail Food Group has provided guidance of ‘underlying’ net profit of around $34.5 million and a reported loss of $87.6 million for FY18. The statutory loss is influenced by the impairments and write-downs the company has booked this year.
Management said that the performance has been hampered by difficult retail conditions, outlet closures and negative sentiment about franchising, particularly against Retail Food Group.
The company tried to reassure investors about its banking relationship, saying that it’s maintaining dialogue with its bankers and their advisers about the FY18 and forecast FY19 results. Retail Food Group will provide more details at its FY18 result in August 2018.
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