Shareholders quiz chairman Peter George over strategy at Gold Coast’s Retail Food Group’s AGM

Heads of embattled Gold Coast franchisor Retail Food Group have acknowledged the daunting task of turning the company around at the company’s annual general meeting this morning.

Retail Food Group, owners of Donut King and Brumby’s amogst others, is facing an uphill battle to save the company. Photo: iStock

HEADS of embattled Gold Coast franchisor Retail Food Group have acknowledged the daunting task of turning the company around at the company’s annual general meeting this morning.

About 40 shareholders have showed up to quiz CEO Richard Hinson and new chairman Peter George what they propose to do about the company’s dire results and diminishing share price.

The group reported an after-tax loss of $306.7 million, an eye-watering turnaround from its $61.9 million profit the previous year and far worse than its $87.6 million guidance.

Retail Food Group's new Chief Executive Richard Hinson says their is “much work to be done” to save the embattled Gold Coast based company. Photo by Richard Gosling

Mr George, who’s been chairman for just three weeks, flagged the drastic changes needed to save the company.

“There is much work to be done at RFG, and I think it is important that I acknowledge the enormity of this turnaround, from the outset,” he said.

“The company is in a position where reducing our bank borrowings and refocusing on our customers are our top priorities.

“To reduce our bank borrowings, it is likely that we will need to sell assets, recapitalise the balance sheet and reduce our cost base by a large amount.

“All of this needs to be done whilst at the same time ensuring that the remaining business is positioned for success in the future.”

FORMER RFG EXECS NOW THE COMPANY’S LANDLORDS

Franchise chain Retail Food Group's (RFG) share price has dived to a record low after it flagged a significant statutory loss this financial year. (AAP Image/Dan Peled)

RFG’s reported earnings from international franchising operations dropped by almost half, from $19.4 million in FY17 to $10.2 million.

The company’s annual report, released in October, showed the company did not open a single new outlet in the first half of this financial year.

It said 305 RFG outlets, which include Donut King, Gloria Jeans, Michel’s Brumbies and Pizza Capers, had closed in 2017-18, including 217 traditional outlets and 15 mobile vans in Australia, as well as 83 international outlets.

Mr Hinson said a commitment to customers and a focus on restructuring the business would give RFG the best chance of future success.

Shareholders will have their chance to grill the board after the formal addresses.

Appearing before the committee was former CEO Tony Alford and Senior Executive Alicia Atkinson of the Retail Food Group, and via video conference Andre Nell. Picture Gary Ramage

Three of its former executives, Tony Alford, Alicia Atkinson and Andre Nell faced a federal inquiry into the franchise sector earlier this week after being formally summoned by a joint committee of the Senate and House.

RFG’s share price sunk to 38.5c during the meeting. It was $4.38 this time last year.