Retail Food Group, which was suspended by the ASX for not submitting its half year results on time last week, has returned to trading to see its shares fall hard.

A short time ago, the shares were down 35% to 1.31.

The owner of Brumby’s, Donut King, Crust Gourmet Pizzas, Michel’s Patisserie and Gloria Jean’s on Friday posted a net loss after tax of $87.8 million for the first half on the back of “difficult trading” conditions and an underperforming franchise business.

The company has decided to close between 160 and 200 Australian outlets by end of the 2019 financial year because of high rents and declining shopping centre performance.

The company has been under pressure since a Fairfax Media investigation revealed hundreds of stores were going to the wall as “a result of a brutal business model”. The company says it has no evidence of franchisees underpaying staff.

The result for the six months to December included non-cash impairments and write-downs of $138 million. The impairments included Michel’s Patisserie ($45 million), Pizza Capers ($4.5 million) and Coffee Retail Division ($34.5 million).

Revenue was $195.5 million, up from $161.9 million. Underlying profit after tax was $24.7 million, down 31.8%.

Dividends were suspended.

The number of franchised outlets fell by 66 to 2450 over the six months. Same store sales growth was just 0.3% and average transaction value growth 2.1%.

Total franchise earnings were down 30% to $47.7 million.

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