Expanding food group lifts profit forecast

The company behind Gloria Jean's, Donut King and Pizza Capers has lifted its profit forecast as it eyes a major piece of the coffee market.

A Gloria Jean's Coffee shop

The owner of Gloria Jean's expects profits to continue to rise despite sluggish consumer confidence. (AAP)

The owner of Gloria Jean's and Michel's Patisserie expects earnings to continue to rise despite sluggish consumer confidence.

Retail Food Group, which also owns the Crust pizza chain and Brumby's bakeries, achieved a 24 per cent rise in half year net profit to $21.5 million.

Underlying profit, which excludes costs from several major acquisitions, rose to $25 million, and the company expects its underlying full year profit to hit $55 million, up $5 million from its previous forecast.

That sent the company's shares to another record high, gaining $1.00, or 15.29 per cent, to $7.54.

The profit growth was driven by its purchase of new businesses, including Gloria Jean's and Cafe2U.

Its Di Bella Coffee takeover has also since been finalised.

That has Retail Food Group confident of further growth, "despite continued retail headwinds, including sustained poor consumer sentiment levels".

It is also looking at more acquisitions, as long as they meet its investment criteria, the company said.

Retail Food Group's coffee roasting operations have more than tripled in size, taking annual production to 5.9 million kilograms.

Chief executive Tony Alford said the company plans to be involved in the full spectrum of the coffee industry, from cafes to coffee capsules for home and specialty markets, he said.

Among Specialty Food Group's other businesses, Donut King and Michel's Patisserie lifted earnings, along with Crust and Pizza Capers.

Brumby's suffered a two per cent drop in earnings, as the company revamped its bakeries.

COFFEE EXPANSION BOOSTS RETAIL FOOD GROUP'S PROFIT

* Net profit of $21.5m, up 24pct from $17.3m in 2013/14

* Revenue of $78m, up 21pct from $64.6m

* Interim dividend of 11.5 cents a share, up from 10.75 cents


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Source: AAP


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