The company just has too much debt. Current has about $260m in debt and $40m equity. Total enterprise value is $300m.
I don't think anyone doubts that the franchise and non franchise businesses have some value. Problem is do the all the businesses combined have at least $300m in value. If you think yes then the stock is approximately priced at these levels for now.
The non franchise businesses is still underperforming too, but the franchise businesses is where all the problems are. Even international franchise outlets declined by 17% last 12 mths, so it's just not a domestic issue. Dairy country seems to be only division that grew output last 12 mths.
Net debt has remained largely unchanged for last 12 mths. The businesses will probably survive in there own right. But it's the equity holders that will suffer here. Ita just basic accounting. Too much debt and not enough assets. Meaning a highly dilutive equity raising at best.
RFG Price at posting:
20.5¢ Sentiment: Sell Disclosure: Not Held
