Retail Food Group Limited (ASX: RFG) shares slipped 32% on Monday morning after emerging from its ASX suspension and issuing a profit downgrade.
Retail Food Group, or RFG, is the name behind Donut King, Pizza Capers, Crust Pizza, Gloria Jeans and more. The now $250 million company, according to Google Finance, has seen its share price sold off from around $7 at the beginning of 2017 to around $1.40 today.
Last week, RFG entered a trading halt, “pending the receipt by RFG of the auditor’s report on RFG’s financial report for the half year ended 31 December 2017.”
This unusual announcement came after the retail business reported that its profit would be lower than last year, and scathing allegations of franchisee mistreatment were published by Fairfax Media Limited (ASX: FXJ).
“As foreshadowed in the release made on 9 January 2018, RFG expects its statutory NPAT for 1H18 to be materially less than the result for the equivalent prior period,” Retail Food Group’s announcement read.
After a few days of its shares being frozen from trading by Australia’s leading stock market operator, ASX, RFG reported a half-year loss of $88 million, down from a profit of $33.5 million in the same half a year earlier.
“We have had to make some tough decisions about our business model, our franchise network and the value of some of our assets,” RFG CEO, Andre Nell said. “The key to improving our performance is to simplify what we do. We have all the assets we need to deliver our diversified business strategy – now we need to make sure we make the best use of those assets.”
Today, the company’s shares emerged from a trading halt and suffered a selloff. According to Google Finance, RFG shares were trading 33% lower at $1.36 on Monday.
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