Australian (ASX) Stock Market Forum

RFG - Retail Food Group

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Country Lad said:
....... Soliton emerging as the dominant shareholder and existing shareholders virtually diluted out of existence.......
https://www.theage.com.au/business/...-not-let-the-market-know-20190709-p525j5.html
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Even with this one-sided deal with all the benefit going to Soliton, the proposal fell over, assuming Soliton did not like what they saw in the books and concern over all the possible class actions.

But don't worry, the directors of RFG now have an even better deal for the shareholders. A minor raising of only 1.5 Billion shares at 10 cents per share and at a slight discount of only 41% to the last price. But don't worry about the dilution, the number of shares will increase by only 8 times.

But wait, there’s more! The number of stores will fall from 939 to 827 but don’t you worry about, that because its underlying earnings will increase over the same period. More money extracted from fewer franchisees?

The Investor Presentation is only 52 pages long and 2.5MB. My suggestion is not to bother wasting the bandwidth.

I can recall the old adage - don't invest in a company with an executive chairman.
 
Country Lad said:
the directors of RFG now have an even better deal for the shareholders. A minor raising of only 1.5 Billion shares at 10 cents per share and at a slight discount of only 41% to the last price.
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Announcement today (Tuesday) that the placement will be at 10c / share and raising $170 million so an increase to 1.7 billion shares.

Also the investor presentation available.

Market response seemed interesting - opened at 12.5c versus previous close of 17c so down sharply then spent most of the day around 14c and closed at 14.5c.

Those with an interest in the stock would probably be best to read the presentation for more details. :2twocents
 
Dona Ferentes said:
up from 7 to 9.5c over the last few days. Volume there, too


Any views? Lockdowns?
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I thought RFG was going to go under because of COVID-19. They were already in deep trouble before COVID hit and I was sure the pandemic would finish them off, given that their franchises were mostly located in shopping centres.

To be honest, I'm amazed that they are managing to keep their head above water given what has happened in the last year and a half.

They have announced nothing of note since their 1H21 Financial Results back in February. No idea what is causing its share price to rise today, but I'm sure we will all find out in the very near future.
 
One of the Deep value funds, with a reasonable record at picking the bottom, gave them a talk up this week. Collins St Value were talking with Chris Judd.
Having been burnt once, I wouldn't touch them with a bargepole, but that may be part of the reason for the signs of life!
 
Dona Ferentes said:
up from 7 to 9.5c over the last few days. Volume there, too


Any views? Lockdowns?
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I actually bought 2 days ago, it is either the bottom and we grow from now..or will collapse and be gone in 6m.
At that price, it is a bet i was ready to take in the investor portfolio.
Time will tell byt read more positive news about this stock this month too..so my looking then buying
 
Seems RFG has got a pulse. The chart looks quite bullish after the higher low, following the price rally in July21. As RFG remains in intensive care, it's not for me either but it may interest others. I'd recommend looking through their last report. It seems they've made a profit.

rfg0709.PNG
 
peter2 said:
Seems RFG has got a pulse.
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In terms of fundamentals, I'm thinking that they might actually gain from the whole pandemic situation once lockdowns end if they've survived and a portion of smaller competitors (sole traders and other small operators) have been wiped out which, anecdotally at least, would seem to be the case. :2twocents
 
peter2 said:
Seems RFG has got a pulse. The chart looks quite bullish after the higher low, following the price rally in July21. As RFG remains in intensive care, it's not for me either but it may interest others. I'd recommend looking through their last report. It seems they've made a profit.

View attachment 129985
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I agree @peter2 . Chart is a watcher but fundamentals are a no no.

Not for me neither.

gg
 
The head lease is owned by RFG and sub leased out to sole traders or mum and dad partnerships. They will not gain from the pandemic no cafe can, they will be in the process of or have gone broke. Rents, wages have not stopped. But if RFG have another sucker they can just put another log on the fire.
 
greggles said:
I honestly thought the COVID-19 pandemic would have wiped RFG out but no, they are still out there suing their failed franchisees and defending a class action.


This company has caused a lot of people a lot of misery. I feel sorry for their franchisees, both past and present.
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the business model will have to change ( if the company survives )

in 2010/2011 i was residing in a district ( 60 metres from the shops/business district ) where i got to observe several RFG franchisees and realized that most ( except maybe the hot-bread bakery ) were fad/fashion driven and it would be hard for them ( the franchisees ) to have a long-term career in them ( sure that coffee shop could convert to a fashion jewelry retailer , or something later , but not without cost and effort , AND the franchisee was less likely to OWN the premises they were operating from )

IF the work from home trend ( for office-workers ) continues ( after the virus lunacy vanishes ) several franchises will remain under a LOT of pressure

can RFG survive with just one vibrant franchise ( hot bread )

i guess time will tell
 
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.
 
i hold SOL ( and BKW ) but could never warm to the RFG business model

i guess my tiny SOL exposure will be plenty for me
 
Belli said:
View attachment 154843
At that interest rate, RFG looks like it is desperate and being done over.
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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. Its 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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