Coffee, bakery and pizza franchise owner Retail Food Group's chairman Colin Archer has blamed short sellers for dragging the company's shares lower.
The group, which includes Gloria Jean's, Donut King, Crust Pizza and Brumby's Bakery, has had a 37 per cent fall in its share price in the past 11 months, which began the year at $7.15.
Mr Archer told shareholders at the group's annual general meeting that the share price did not reflect the true underlying value of the company and its future growth.
He said the tough retail market, negative commentary around the domestic franchising industry and short selling have weighed on the group's share price.
"The relentless activity of short sellers is undermining perceptions regarding the group's credentials, performance and future prospects," he said.
"Your board understands that short selling is a permitted activity, however, I would implore our members to consider the potential damage to your company, and indeed your own portfolio, before lending shares for these purposes."
Retail Food Group managing director Andre Nell affirmed the group's 2018 financial guidance for underlying net profit to grow by about six per cent.
He said growth from the group's international and commercial divisions would offset weaker-than-expected trade from its domestic division.
"RFG retains an optimistic outlook despite the challenging domestic retail market, with domestic franchise division performance anticipated to be weaker than originally forecast, offset by new business gained across our other divisions, largely commencing in the second half," he said.
The group made a net profit of $61.9 million in the year to June 30, up 17 per cent from the prior year.
Shares in RFG closed nearly three per cent higher at $4.51 on Thursday.
