Retail Food Group delivers $66.5m revenue in H1 FY25, secures Firehouse Subs deal

Multi-brand food franchise manager Retail Food Group (ASX: RFG) has delivered $66.5 million in underlying revenue and $16m in underlying EBITDA for the first six months of the 2025 financial year.

The Queensland-based group reported 24.7% revenue growth on the previous corresponding period (pcp) including a full six-month contribution of $10.2m from Beefy’s Pies, acquired in late 2023 for $10m.

Underlying EBITDA was up 4.2% on the pcp and 15.8% on the second half of the 2024 financial year.

Network sales

Sales from the group’s domestic network grew 3.2% on the previous six-month period as core coffee, café and bakery brands Gloria Jean’s, Donut King, Brumby’s and Beefy’s traded through challenging economic conditions.

The Beefy’s acquisition partially offset lower network sales in the group’s quick-service restaurant (QSR) segment.

Chief executive officer Matt Marshall was pleased with the group’s half-year performance.

“This is an excellent set of interim results [and] we continue to invest in the quality of our retail systems to enhance our network whilst targeting short-, medium- and long-term growth opportunities,” he said.

New outlets

Retail Food Group opened 25 new outlets across its core brands during the period, while the closure of 17 low-performing outlets is expected to improve overall network quality in the future.

Average weekly sales of the new outlets were 35% stronger than those of the outlets that closed.

The company completed its acquisition of CIBO Espresso in December and expects CIBO to contribute an additional 22 outlets in the second half of 2025.

Cash reserves

Retail Food Group had cash reserves of $21.4m at the end of December including unrestricted cash on hand of $17.7m, resulting in net debt of $7.1m.

Underlying operating cash conversion was 61% for the period, with the first-half timing of payments for 2024 short-term incentive plans and annual expenses, including insurance premiums, having an impact.

Retail Food Group’s debt facility at the end of December included $15m in undrawn facilities.

Firehouse Subs agreement

The company has also signed a 20-year development agreement with Canadian company Restaurant Brands International (RBI) to launch the Firehouse Subs brand in Australia.

Founded in 1994, the sandwich chain has more than 1,300 outlets across North America and expanded overseas after RBI acquired it in late 2021.

Mr Marshall said the company plans to open 165 new Firehouse Subs outlets across Australia over the next decade, with the first to launch in south-east Queensland later this year.

Perfect opportunity

“We have rejected other international brands in search of the perfect opportunity which aligns with our core competencies and we have spent over 12 months completing due diligence, including multiple market visits to assess the suitability of Firehouse Subs for Australia,” he said.

“Firehouse Subs is a key pillar of our ambitious growth strategy and we are confident consumers will be excited by the brand’s high-quality sandwich product together with an excellent guest experience.”

RBI is one of the world’s largest QSR companies, with over $40 billion in annual sales and more than 30,000 restaurants in over 120 countries.

Mr Marshall said the Australian sandwich sector – which is estimated to be worth over $1.7b and continues to grow, with only one national chain competitor – presented an attractive proposition in comparison to other food categories.