RETAIL FOOD GROUP LIMITED (RFG)
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20/02/2025

1

Buy

$3.00

51.52%

Retail Food delivered first half EBITDA that was ahead of expectations.

Shaw and Partners observes the business is changing to growth from a "turnaround story", having reached an agreement with Restaurant Brands International to launch the Firehouse Subs brand in Australia .

It will also extend the roll-out of Beefys to 50-plus stores over three years, from the current 15. The broker takes a measured view on margins and reduces FY26-30 estimates for earnings materially.

With an eye on peer valuations, which have contracted, the target is reduced to $3 from $4. Buy rating retained.

FORECAST
Shaw and Partners forecasts a full year FY25 dividend of 0.00 cents and EPS of 22.80 cents.
Shaw and Partners forecasts a full year FY26 dividend of 0.00 cents and EPS of 27.20 cents.

24/02/2025

1

Buy

$4.25

114.65%

Petra Capital notes Retail Food's 1H25 bettered its expectations mainly due to strong EBITDA margin in the CCB business (7.7% vs Petra's 6.5% estimate).

QSR business was significantly down and still faces challenges, the broker believes, but may eventually be buoyed by the addition of the Firehouse Subs brand.

The broker upgraded forecasts mainly for CCB business but also lifted revenue growth expectations for QSR. The broker has not factored any positive impact from the RBA rate cut, and acknowledges it is an upside risk.

The Buy rating is retained and the target price increases sharply to $4.25 on 1:40 share price consolidation, earnings changes, lift in equity beat to 1.5x from 1.35x and reduction in terminal growth rate to 2.0% from 2.5%.

FORECAST
Petra Capital forecasts a full year FY25 dividend of 3.70 cents and EPS of 22.30 cents.
Petra Capital forecasts a full year FY26 dividend of 8.00 cents and EPS of 26.80 cents.