Compelling opportunity, page-14

TFG will be one of those shares where I was right in my assessment of events but totally wrong in the outcome.
I bought in because they looked amateurish and under funded, thus a likely target for much bigger fish like KKR and VTG in an industry which is attracting quite some interest. I still think this will happen but a premium price, for which I was hoping, is out of the question. Right now TFG is in the emergency ward hovering in and out of consciousness. The longer this goes without a resolution, the less we will get.

And in a financial sense I can see why. The 1HFY18 Results - SHOCKING - Comparatives to 1HFY17 should have shown massive improvement - didn't!
Revenue flat - declined by 0.3% despite acquiring a number of businesses during the year
Gross margin  (materials, wages, contractors) to sales declined from 30% in 1HFY17 to 20.4% in 1HFT18...50% decline in GP margin!!!  
Occupancy Expenses as a % of sales increased from 7.6% to 10.8%
An impairment of $1.55m - which is code for poor acquisition decisions
All up, a loss of $3.399m or 2.7c a share
The Balance Sheet reflects a poor condition - the current ratio is 0.58X. Suppliers will be getting jittery. Cash is down some $1.83m whilst  borrowings are up $0.97m...in just the last 6 months!
The MD should not only step down, but retire from the industry, her reputation is shot!
As a shareholder in VTG I hope they can pick this up at a good price and then totally rebrand it. The brand is amateurish and their business model with coolSculpting a total dud!
By about now, Paul Fleming will have to make another convertible note advance or good night nurse and amen!