Shares in Gold Coast food business franchisor Retail Food Group surge 32pc higher

The share price for embattled Gold Coast food franchisor Retail Food Group has surged today — a rare piece of good news for the company’s executives and shareholders.

Long-suffering Retail Food Group shareholders have been sweetly rewarded today with the stock price up 30 per cent. Picture: supplied.

THE share price for embattled Gold Coast food franchisor Retail Food Group has surged more than 30 per cent today — a rare piece of good news for the company’s executives.

The share price was 22.5¢ at 2.30pm, up 32.3 per cent, and adding $10.03 million to the company’s market capitalisation.

The spike in the share price returned it to levels not seen since late April.

RFG copped a ‘speeding fine’ from the ASX for the huge share price surge, which is normal practice from the share market regulator.

Former CEO Tony Alford and senior executive Alicia Atkinson, of Retail Food Group, appear before the joint parliamentary inquiry into franchising earlier this year. Picture: Gary Ramage

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The company was asked for an explanation for the price change and increase in the volume of securities traded.

It responded referring an article published on Friday where chairman Peter George commented on the company’s turnaround strategy.

“Further to its previous announcements (including on 29 March and 3 April 2019), RFG confirms that it is exploring a range of options to reduce debt, including the potential sale of non-core assets as well as equity and other debt funding proposals,” the RFG statement reads.

“Discussions in relation to these matters are advanced and a further update will be provided to the market in due course.”

RFG was savaged by the joint parliamentary inquiry into the franchise sector earlier this year, which found it had bled franchisees dry with an unjust business model which remained in place.

Pizza Capers is one of Retail Food Group’s franchises.

The company widened its already gaping losses in the first half of the financial year, posting a six-month $111.1 million net loss on decreasing revenue it said meant “the Group’s current financial position is unsustainable”.

In March the company received good news when its lenders, NAB and Westpac, agreed to provide a waiver for a key financial review that had hung over the company since the end of February.

It owes more than $250 million and the waiver was crucial to enable the company to continue as a going concern.