Below is an extract from AFR article 23 February 17 after RFG released its last profit results.
"Retail Food Group, which owns Michel's Patisserie, Donut King, Brumbies Bakeries, Crust Gourmet Pizza and Gloria Jeans, also delivered a strong result, with net profits up 12.7 per cent to $36.2 million.
Same-store sales across RFG's traditional franchised brands were patchy, with weighted same-store sales up just 1.4 per cent and average transaction value up 2 per cent. But total sales rose 9.2 per cent to $161.9 million, buoyed by the acquisition of Hudson Pacific in September. The strongest sales growth came from the new commercial division, international operations and coffee distribution.
RFG reaffirmed its guidance for 20 per cent growth in underlying net profit this year and said it was well placed to pursue further acquisitions. The interim dividend rose from 13¢ a share to 14.75¢, payable on April 10."
According to Commsec, RFG has had an average return for shareholders of 17.7% for the past 10 years (even at a share price $5.10). When the RFG share price was at its high for the year of $7.37, from memory the average return for shareholders for the past 10 years was around 20%.
Compare that to CBA's average shareholder return for the past 10 years - 10.2%
Compare that to NAB's average shareholder return for the past 10 years - 3.9%
Compare that to WBC's average shareholder return for the past 10 years - 9%
Compare that to ANZ's average shareholder return for the past 10 years - 6.4%
In the short term, the shorters may make money gambling/shorting the company. In the long term the share holders will make money, if the history of RFG is anything to go by.
5 year chart
10 year chart
There are only 2 stocks I am buying at the moment - Retail Food Group and Fortescue Metals Group. Long term, RFG looks like a great buying opportunity.
RFG Price at posting:
$5.21 Sentiment: Buy Disclosure: Held
