The owner of the Donut King franchise, Retail Food Group (RFG), said eight out of 108 stores remain closed after suffering flood damage and are unlikely to reopen because it will be “uneconomical”.

The company said it will soon provide a financial impact guidance of the floods but has foreshadowed that there “will be a consequential adverse impact on RFG revenues in the short to medium term”.

According to chief executive Tony Alford, this would lead to a lower full-year profit but remains confident in achieving a positive financial year 2011 net profit after tax from core operations over that reported in FY10, being $26.4 million.

“Ultimately, however, RFG’s likely FY11 NPAT result is a matter that will be influenced by unique and highly unusual circumstances whose full impact is not yet capable of assessment,” he said.

Also, the “significant numbers” of franchisees that did not trade on some or all of the public holidays over Christmas as a result of the increased wage cost introduced by the Fair Work Act is also expected to have an image on the guidance results.

RFG anticipates its first half net profit for this year will be in the 10 to 15 per cent range.