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RFG - Retail Food Group

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greggles said:
I agree. Is an establishment fee of $600,000 normal for a commercial $20 million debt facility? It seems like management is desperate to bolster their dwindling cash reserves and these kind of deals make me think that management think the worst is yet to come.

RFG was down to around $24 million in cash at the end of 2022. With interest rates on the way up and a pessimistic outlook for the Australian economy RFG looks to be battening down the hatches in anticipation of a rough ride ahead.

I've never liked this company or its business model and I honestly can't see it staying in business long term. It's franchises seem very 20th century to me and haven't adapted to a changing retail environment. When was the last time anyone went to Donut King or Michel Patisserie? It isn't 1990 anymore.

Good luck to holders, but I wouldn't touch RFG with a barge pole.
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in 2011 and early 2012 i was residing in a near CBD suburb ( in Brisbane ) and got to observe several RFG franchisees regularly ( every time i went to the local shopping area and other nearby ones )

the hot bread kitchen( bakery ) seemed to be the only franchise with a persistent customer base , that was 2011 i wonder what the 2023 economy looks like in the same area

BTW i went to physio today and heard about two renters ( different households ) hit with more than 30% rent increases in the same week ( one household is moving , the other in shock and exploring options ) , one might wonder if discretionary sending is liable to have a headwind
 
Dona Ferentes said:
Hungry / thirsty

Key Points:
• Firm commitments received to raise $24.9 million via a share placement to sophisticated and institutional investors at an offer price of $0.08 per share.
• Binding term sheet signed to secure a new $20.0 million debt facility with Washington H. Soul Pattinson and Company Limited.
• Launch of Share Purchase Plan to raise approximately $2.5 million, providing existing eligible shareholders the opportunity to participate in the capital raising.
• Net proceeds to be used to reset and strengthen balance sheet, and to pursue core business and inorganic growth opportunities.

Yeah, right.
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If the contents of this news article is true, that $20m debt facility may not have been the best move by SOL.

www.theage.com.au

Fast food prices go up as KFC, Taco Bell operator fights inflation

Price increases helped to boost sales at Restaurant Brands NZ as shoppers take a more budget-focus to their fast food.
www.theage.com.au www.theage.com.au
 
RFG is the most drawn out, agonising corporate death spiral I think I have ever witnessed. It's going down the gurgler in slow motion with buckets of water being thrown overboard as even more water floods into the floundering vessel.

They recently raised a whopping $365,600 by issuing 4,570,000 shares at 8c per share. Those shares are already underwater by close to 20%. Now RFG is taking on more debt just to stay afloat. That debt will somehow need to be serviced.

And they are still facing a class action by disgruntled franchisees.

Tick tock, tick tock...
 
frugal.rock said:
Dead dogs eyes with dead horse eh?

www.smartcompany.com.au

Queensland-based Beefy’s Pies acquired by Retail Food Group for $10 million

Beefy’s Pies may soon be available for franchising after an agreement was reached for the retail chain’s acquisition by RFG.
www.smartcompany.com.au www.smartcompany.com.au
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It's good to hear that after their $9 million FY loss announced in August that they are borrowing more money to buy a pie business that they hope they can franchise out to more suckers... I mean franchisees.

Remember Pie Face?

This smacks of desperation and is hardly surprising given rumours of a takeover. if I were a substantial shareholder in RFG I would be praying for a takeover that would get me out of this car crash of a company.
 
greggles said:
It's good to hear that after their $9 million FY loss announced in August that they are borrowing more money to buy a pie business that they hope they can franchise out to more suckers... I mean franchisees.

Remember Pie Face?

This smacks of desperation and is hardly surprising given rumours of a takeover. if I were a substantial shareholder in RFG I would be praying for a takeover that would get me out of this car crash of a company.
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i noticed a while back SOL had bought a toehold ( 6.8% ) and was more than a little surprised

Substantial Shareholders List​

NAMESHARE HOLDINGSHARES HELD (%)
Regal Funds Management Pty Ltd306,483,91312.53%
Washington H. Soul Pattinson and Company Limited166,710,6816.81%
Castle Point Funds Management155,269,5226.32%
Thorney Opportunities Ltd127,350,0005.21%

all i can say with those fund managers holding is , somebody at RFG puts out one heck of a presentation

( i hold SOL )
 
divs4ever said:
i noticed a while back SOL had bought a toehold ( 6.8% ) and was more than a little surprised

Substantial Shareholders List​

NAMESHARE HOLDINGSHARES HELD (%)
Regal Funds Management Pty Ltd306,483,91312.53%
Washington H. Soul Pattinson and Company Limited166,710,6816.81%
Castle Point Funds Management155,269,5226.32%
Thorney Opportunities Ltd127,350,0005.21%

all i can say with those fund managers holding is , somebody at RFG puts out one heck of a presentation

( i hold SOL )
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I have said this before when funds have dogs amongst their portfolio. When everybody here understood it was a dog a long time ago, how on earth does the investment guy in the funds think this dog is worth holding.
 
Country Lad said:
I have said this before when funds have dogs amongst their portfolio. When everybody here understood it was a dog a long time ago, how on earth does the investment guy in the funds think this dog is worth holding.
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well i don't read minds but SOL is usually betting on a long slow grind back to a viable company

had i seen Geoff Wilson in there instead i would have been suspecting a take-over in the wind

but to see some fairly conservative fund managers on board makes me wonder if there is a super-salesman giving the presentations because i could never sell the long-term value of RFG , to me they seemed to be mostly fad-driven franchises coffee shops , hot bread bakeries etc etc things that would take a hit if city-folk started losing jobs
 
galumay said:
...and they say small investors cant have an edge over large institutional investors!
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sometimes we do but we never seem to make a big enough noise about it to draw the attention of ( ad-reliant ) media

which is a good thing if a long term investor , not so good if a shorter term player
 
Belli said:
What is missing from that substantial holder list is that RFG is on the hook to SOL for a $20m loan.
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yes SOL does that as well , a smaller version of the Warren Buffet playbook , but SOL must still think the loan can be repaid in due course

so maybe there is a RFG capital raise in the works to repay that loan before it turns from lifeline into a boat anchor
 
Country Lad said:
I have said this before when funds have dogs amongst their portfolio. When everybody here understood it was a dog a long time ago, how on earth does the investment guy in the funds think this dog is worth holding.
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You think it's a dog, your holding is $1,000 - $1,000,000 in size, no problems to get out.

If the company is in trouble, fundies trying selling their $1,000,000 - $10,000,000 sized stake might involve so much slippage that they'd be taking an even bigger loss than just staying in.
 
InsvestoBoy said:
If the company is in trouble, fundies trying selling their $1,000,000 - $10,000,000 sized stake might involve so much slippage that they'd be taking an even bigger loss than just staying in.
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It would be interesting to see how long they have held the shares and when SOL gave the $20 mil loan. Actually, I am not interested enough to waste the time looking.
 
Hmm, SOL aren't stupid so I decided to read the CEOs speech. They are looking to SOL for another sum of money. Besides the pies they have developed another franchise based on ribs that appears to be expanding well.
I think we should keep an eye on this company and especially what SOL does.
 
Knobby22 said:
Hmm, SOL aren't stupid so I decided to read the CEOs speech. They are looking to SOL for another sum of money. Besides the pies they have developed another franchise based on ribs that appears to be expanding well.
I think we should keep an eye on this company and especially what SOL does.
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as a SOL holder ( and later bought into SOL investments ) they do have a fair record

after SOL moved into API and then let it be taken-over later ... are SOL dressing this up for a pay-day

interestingly the other funds that are notable shareholders are not known for their outrageous gambles either ( i just don't see the attraction compared to say RBD , which has international franchises as well )
 
galumay said:
Just seem to be so many easier ways to make money?
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well looking at the SOL loan to AIS was fairly juicy ( for SOL ) , i haven't seen the details of the RFG loans but SOL seems to know how to make a good deal .

so maybe RFG holders have a lifeline if prepared to endure

i will be watching with interest but not rushing to reach for my wallet ( i am still trying to get a good entry for NCK )
 
The share price of RFG is looking pretty bullish in 2024. Hopefully the franchisees are happier now and can work to improve their and RFGs business. I would like to see price get back to the old highs near 0.10 soon.

rfg1.PNG
 
DONUT KING OCCASIONS MOVES INTO FULL QUEENSLAND LAUNCH

Retail Food Group Limited (ASX: RFG) is pleased to announce that our innovative eCommerce solution Donut King Occasions (dkoccasions.com.au) has successfully moved from pilot into a full launch into Queensland stores.Approximately 50% of Queensland Donut King stores have immediately signed up to launch the service which provides our Franchise Partners an incremental revenue stream without any additional rent and minimal additional labour.

Participating Donut King stores become mini factories with our eCommerce solution sending the order directly to the closest store to minimise delivery costs.

Donut King Occasions targets unique occasions for celebrating birthdays, baby showers and corporate morning teas with an Average Transaction Value 3.8x higher than in store transactions.
Donut King Occasions will launch into Queensland stores in June before a staged national launch in July and August.

This announcement has been authorised by RFG’s Chief Executive Officer.

i do not hold this share ( but do hold SOL which has a 6.8% interest )
 

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