Shares in Gold Coast’s Retail Food Group hit all-time low as company battles to restore investors’ faith

SHARES in Gold Coast franchisor Retail Food Group have continued to bleed value, sinking to their lowest price since the company listed on the ASX in 2006.

RFG’s share price continues to be crushed. Photo: iStock

SHARES in Gold Coast franchisor Retail Food Group have continued to bleed value, sinking to their lowest price since the company listed on the ASX in 2006.

The embattled Southport company, which listed at $1 per share and has traded as high as $7.65, sunk to 79C on Friday.

The price had gathered itself to open yesterday at 85C, only to close at 81C after 6.2 million shares changed hands.

By 11am today, the price had again dipped to 79C and short sellers were banking on the price falling further, with RFG the ninth most shorted stock on the ASX, with 11.39 per cent of shares in a short position, according to the monitoring website Shortman..

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A Donut King franchise.

RFG stocks have been in steady decline, punctuated by sharp freefalls, since December — shedding 81.6 per cent of its market capitalisation in the five months since — from $804.1M to $148 million.

The franchisor, which operates Gloria Jeans, Michel’s Patisseries, Brumby’s Donut King, Crust Gourmet Pizza and more, posted a $87.8 million first-half loss in March, down more than $120 million on last year’s $33 million profit for the same period.

RFG is also battling a $1.62 million debt claim from a company run by the partner of its major shareholder and former managing director Tony Alford.

RFG denies they owe any money to Alicia Atkinson’s Exit 57 company, which is in liquidation.

Andre Nell, Managing Director, Retail Food Group. Photo: Regi Varghese

The company said at least 160 of its domestic franchise operations, which include Donut King, Michel’s Patisserie, Pizza Capers and Gloria Jeans, are “unsustainable over the long-term” and flagged their closure by the end of next financial year.

In March RFG pledged to reduce costs for franchisees as it looks to rebuild the company in the wake of a raft of problems with shareholders, dissatisfied franchisees, class actions and depressed retail conditions.

However the franchisor stopped short of reducing the price of coffee franchisees are required to buy from RFG.

Franchisees say RFG’s coffee is among their biggest expenses, and costs more than buying the same product at supermarket retail prices.