RFG - Retail Food Group

[divs4ever]

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.

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

 

[Belli]

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.

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

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

 

[greggles]

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...