Dona Ferentes
Pengurus pengatur
- Joined
- 11 January 2016
- Posts
- 16,408
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The polite version
...the spotlight remains on the group over the carrying value of assets and how they are capitalised. For FY 2020, Freedom Foods capitalised development costs of about $62.4m and about $171m of construction costs in the previous financial year.
The company had a plan to outlay about $160m a year on capital spending at a time that some say cashflows have been poor. It has net debt of $300m and equity of $671m, so some expect a capital raising could be on the cards.
Sources say it is also worth noting that the number of parties shorting the stock had surged in the days before the announcement.
You are too polite
Freedom Foods has extended its voluntary suspension until October 30, saying it may be some time before the embattled company can resurrected. The company said a number of activities needed to be considered by the broad before it could be in a position to provide information on the historical issues identified, the financial position and outlook of the
company.
The company said it will need to conclude its investigation into the historical issues referred to in previous announcements, complete its annual accounts, provide appropriate guidance, search for a new chief executive officer and chief financial offer, and complete any necessary capital initiatives.
The company said it will keep investors advised of any material developments in accordance with ongoing continues disclosure obligations.
The company said it had received a waiver from its financiers in relation to its financial covenant obligation at June
it may not be. Just withering lack of process, or competence. There's an AFR article todayFraud.
On its share price alone, Freedom looked like a winner. Shares had risen from about 35¢ when the Perich family bought in back in 2005 to above $5 a share, fuelled by a series of acquisitions and capital raisings.
Its products, including Messy Monkey kids snacks and So Natural soy drinks, popped up on major supermarket shelves, and the company seemed to have successfully found a market in Asia. It went from a small company to a much larger one very quickly.
Someone has been asleep at the wheel. The Board hasn't handled the growth well, there are hints that 'performance bonus structure' was misaligned. The CEO was described variously as "controlling", "personable" and with a "short temper". The CFO abruptly resigned. When it all came to a head, an Announcement flagged the old stock couldn't be repurposed; this raised some accounting issues as the cost of goods had been carried forward as a capital item, when it should have been included as a cost of sales.Not every decision was perfect. Much has been made of the decision to sell a minority stake in The a2 Milk Company, but it seemed to be delivering on its core strategy and there was little attention given to whether its internal systems were keeping up with its growth.
But despite the outward success, institutional investors were relatively scarce, quietly questioning the company's lack of cash earnings for at least two years, despite an impressive and growing brand portfolio.
it may not be.
Oaktree?! Yikes"The company has made good progress in this regard and remains in advanced discussions with a new investor to support the capital and operational turnaround of the business," said a spokesperson.
Freedom Foods says it is assessing options for its cereal and snacks division as it looks to simplify its business as part of its recapitalisation plan.
Cereal incompetence...."serial incompetence if not outright fraud. "
Marginally better than cereal incontinence?Cereal incompetence.
They need a All Bran new approach without the corny flakes....
@Dona Ferentes @Miner @basilio and others.
The posts this year on Freedom have been such an enjoyable read with excellent links. Thanks all
The Perich family seem to have taken their eye off the ball. They are a resilient mob but may be suffering generational fatigue, ( ole Jamie is a good example at Crown ) and could bounce back. Could, I say, but not with any of my dosh.
For those new to ASF, NSW/Queensland and Australia, this is how business was done in the 70's and 80's. My eyes misted over with nostalgia.
One of the Ross Island Hotel regulars has asked me to fly down with him and another pilot for the repo of an aircraft in the Mackay hinterland ( not the Perich's ). I may drop in and say g'day to old man Perich if he is still thereabouts and not back in Sydney.
gg
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