ASX issues Gold Coast company Retail Food Group with price query after share price rise

THE ASX have issued a “please explain” to Retail Food Group, after the embattled company’s share price jumped almost 60 per cent in four days. Here’s what the company had to say.

RFG is working to right itself. Photo: iStock

THE ASX have issued a “please explain” to Retail Food Group, after the embattled company’s share price jumped 13c in a single day’s trade.

RFG shares have hovered just above 40 cents in recent weeks, but shot up by 59 per cent over four days to close at 67c yesterday.

The price rose 13c in a single day’s trade yesterday.

It dived by almost 15 per cent today after questions were asked of its meteoric hike - plummeting 10c to 57c by 2pm.

The ASX issued a price query to the company last night, asking whether it was aware of any information concerning it that had not been announced to the market which could explain the recent trading in its securities.

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Retail Food Group had to explain itself to the ASX after its share price went up 59 per cent in four days.

In its response announced to the exchange this morning, RFG replied “no”.

”RFG is not aware of any other explanation for the recent trading in its securities,” the company’s brief statement said.

“RFG confirms that it is in compliance with the listing rules.”

This time last year, shares in the company were trading above $5, while three years ago they hit $7.30.

The company has flagged a net loss of $87.6 million for the financial year, pushed by a payout to departed managing director Andre Nell.

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Franchise chain Retail Food Group may sell its Pizza Capers brand.

RFG has spent the best part of the year in the top 10 most shorted stocks of the ASX, however that standing appears to have slipped.

Monitoring website Shortman, which had RFG as its 11th most shorted stock in May, with 11.39 per cent of shares in a short position, today has it placed in 51st position with 5.27 per cent of stock shorted.

The week’s price volatility followed news earlier this month the group was testing the market for potential buyers of its Donut King and Pizza Capers brands as it continues its recovery from accusations of a poor franchise model and changes to reporting that affected its bottom line.

Donut King could be earmarked for sale.

The company has lost more than half a billion dollars of its market capitalisation since stories of the destructive franchise model broke late in December.

RFG said in June said “one-off turnaround costs” and impairment charges booked on December 31 would drive down an underlying net profit after tax of $34.5 million.

Its struggles have placed significant pressure on its debt position, and it remains under strict covenants with its major lenders, despite them agreeing to waive testing of the covenants for the financial year.