Retail Food Group has slightly exceeded its downgraded profit guidance, booking double-digit earnings growth despite weaker performance from Pizza Capers and Michel’s Patisserie.

The Crust, Pizza Capers, Brumby’s Bakery, Michel’s Patisserie, Gloria Jeans and Donut King owner booked a 14 per cent increase in net profit to $75.7 million for the year ended 30 June, underpinned by a 12.1 per cent increase in earnings before interest, tax, depreciation and amortisation to $123.5 million.

Total group sales increased by 27 per cent to $349.3 million, while network sales reached $855.9 million.

Its franchise division managed to book a slight growth in EBITDA, increasing 1.5 per cent to $1.4 million, with a 9 per cent increase in EBITDA from coffee brands keeping things in the black.

Michel’s Patisserie struggled, alongside the QSR division, which includes Pizza Capers and Crust, however a stronger performance from Donut King saw same-store-sales increase for the franchise division by 0.9 per cent.

Managing director Andre Nell, who recently stepped in to replace Gary Alford, expects underlying NPAT growth of 6 per cent in FY18, with all divisions expected to grow and particular strength predicted in international and coffee wholesale operations.

“Global license activity not only provides immediate short term benefits on the grant of a new license, importantly,y it also contributes to building recurrent revenue streams which increase as international territories growth their outlet footprint, providing a strong platform for increased royalty and product supply earnings,” Nell told the market.

The number of total stores in the network decreased by 14 on the closure of 45 Michel’s and Pizza Capers sites, but a slate of new master franchise agreements increased total operating territories to 81.

RFG shares dropped just over 1.4 per cent by midday trading on Tuesday.

More to come…