Retail Food Group continues run of acquisitions

Leading franchisor and brand manager Retail Food Group has continued its mini spree of acquisitions, announcing it has reacquired Brumby Bakeries master franchises for Western Australian and the Northern Territory for an undisclosed price.

The acquisitions follow the purchase of the Brumby’s master franchises in North Queensland and New Zealand, and now means RFG controls all master franchises in Australia and New Zealand, with the exception of the small South Australian master franchise.

Just prior to Christmas RFG also announced it had completed the acquisition of the 23 store DCM Coffee and Donuts chain (a direct competitor to RFG’s existing Donut King franchise) and started due diligence to buy the 37-strong Big Dad’s Pies chain.

The latest deal to buy the 50 store WA Brumby’s master franchise and the eight store Northern Territory master franchise will be funded through a mixture of cash and shares.

RFG chief executive Tony Alford said in a statement the acquisitions will deliver a solid boost to the company’s bottom line.

“The transaction will deliver to RFG, the equivalent in terms of EBIT contribution of an additional 32 new Brumby’s Bakeries outlets.”

All six acquisitions are expected to make a contribution to earnings in the second half of the 2009-10 financial year.

RFG expects net profit from core operations will increase 10-15% in the six months to December 31, 2009 to $12.2-$12.7 million, compared with $11.05 million in the previous corresponding period.

The company expects to release its first half results in February.