Thats long been their problem. Almost every brand that they have ever purchased is now smaller and worth a lot less than when they purchased it so to make it look like they are growing they have always raised money from shareholders or borrowed it at high interest rates in order to purchase something new to make it look like they are growing.
These results show that yet again. They claim in the very first bullet point in bold letters to have "Network Sales growth of 3.2% on 2H24 to $257.1m" which is misleading. If you look further down you find out how it is that they claim this.... ie "including a full 6-month contribution from Beefy’s of $10.2m". Take out the newly purchased business and the growth is negative. In other words they didn't grow at all, they simply purchased revenue using borrowed money then tacked in onto the "network sales" so that it looked like things were improving. AND this growth claim was their headline bullet point !
They have been doing this for a very long time. Continually buying new stuff with other people's money to make it look like its a growing business, all the while most of the existing businesses that they own continue to go backwards. RFG feels like the guy down the road who buys the latest model car, fails to service or look after it then borrows money to buy the next thing. Over the years they end up with a collection of lemons in their yard with little value.
I do wish RFG could pick up their act and drive SSS and margins forward for their existing network so there is something of substantial value there. To me it feel like they are gambling addicts buying new businesses like scratchy tickets just hoping to get rich quick with the next gamble rather than doing the hard yards buying the brands that they own.
Its great to see a green day for once though. RFG holders have been doing it tough and I'm pleased its had a bit of a bounce after the freefall which has followed the capital reconstruction.
Best wishes and I hope there are more green days to come.
RFG Price at posting:
$2.14 Sentiment: None Disclosure: Not Held
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