A good analysis. However, I believe you have overlooked several...

A good analysis. However, I believe you have overlooked several critical parts to the story.

The first is like for like store comparison for H1 FY22 is meaningless given the Covid-19 lockdowns extended for months in NSW and Vic with no ability to trade.

The second is the significant growth in the international operations. RFG is no longer just an Australian company.

I agree with your research on the ACCC and Class Action but I also agree with the Board decision to defend any claims against RFG. If there was a strong case for either action based on events in 2015-17 they would have been settled a long time ago in my opinion. Anyway these are one-off actions that should not impact on forward looking valuations. Nevertheless investors do not like the uncertainty.

With the Goodwill it is based on eight retail brands including Gloria Jeans, Michel’s Patisserie, Donut King, Crust, Pizza Capers, Brumby’s Bakery, Cafe2U and The Coffee Guy. According to the company website there are stores – approximately 700 domestically, and around 600 outlets across 59 international licensed territories. Goodwill is always going to be a significant component in any business model where you operate this number of outlets worldwide.

Perhaps the most interesting fact at present is what happens with Executive Chair, Peter George at the end of FY23 when his current contract expires? Will RFG become a takeover target assuming trading normalises in FY23 after several covid impacted years. A lot to take in. DYOR.