I don't consider RFG over leveraged looking at the total picture not just tangible assets as that's only one aspect of their financial position.
Goodwill is not 570m it is approx 240m. Equity less Goodwill does not equal Tangible Assets. You are looking at the net tangible asset position rather than just at tangible assets as aicp was doing. The total assets 832M less intangible assets and deferred taxes leaves tangible assets of approx 206M.
The picture I'm considering is the debt to assets (excluding goodwill and deferred taxes) ratio ie 267M to approx 530M so approx 50%. I appreciate there will be some who claim that the brands have little value but that is an over-statement by those who want to suggest that the 36% of the business that the domestic franchise network represents is 100% of the business. It's not. I don't live in Australia at the moment and in my country RFG has quite a few outlets, but there has been no negative coverage and no brand damage. The SMH and ACA have no global reach and RFG's future growth will I suspect be international.
Also RFG has been badly run but their revenue is still growing.
RFG Price at posting:
$1.09 Sentiment: None Disclosure: Not Held
