The S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a decent gain. In afternoon trade, the benchmark index is up 0.4% to 7,285 points.

Four ASX shares that have failed to climb with the market today are listed below. Here's why they are dropping:

Ampol Ltd (ASX: ALD)

The Ampol share price is down over 5% to $31.22. The catalyst for this has been the fuel retailer's shares going ex-dividend this morning for its fully franked $1.55 per share final dividend for FY 2022. Eligible shareholders can now look forward to receiving this dividend at the end of the month on 30 March.

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura share price is down 9% to 55.5 cents. This appears to have been driven by comments out of Tesla at its investor day. The electric vehicle giant revealed that it plans to drop the use of rare earths in its future electric vehicle models due to health and environmental risks that come with mining the critical minerals.

GQG Partners Inc (ASX: GQG)

The GQG share price is down 3% to $1.44. This may have been caused by reports that GQG is investing heavily in the Adani empire. According to the AFR, the company has poured $2.8 billion in four Adani companies. It believes an activist short seller attack has created significant value for investors.

Retail Food Group Ltd (ASX: RFG)

The Retail Food share price is down 7% to 7.9 cents. This morning, this embattled quick service restaurant operator announced firm commitments to raise $24.9 million via a share placement to sophisticated and institutional investors. These funds will be raised at 8 cents per share, with the proceeds used to reset its balance sheet and support growth opportunities.

The post Why Ampol, Arafura, GQG, and Retail Food shares are dropping today appeared first on The Motley Fool Australia.

A much-maligned ASX stock has rocketed 96% over the last three months, but one fund manager reckons there's plenty more where that came from. 

Retail Food Group Ltd (ASX: RFG) is the franchisor for well-known brands like Donut King, Michel's Patisserie and Gloria Jeans.

Six years ago, the share price was flying high around the $7 mark. But then it ran into legal and regulatory problems from consumer watchdog Australian Competition and Consumer Commission over its treatment of some franchisees.

By March 2020, when stocks crashed during the first wave of COVID-19, Retail Food shares were virtually worthless, going for around 3 cents.

It was still sitting at 5 cents last November. But since then it has pretty much doubled, to close Tuesday at 9.6 cents.

'Positive earnings outlook' looking good for stock price

Glenmore Asset portfolio manager Robert Gregory, who held the stock last year in anticipation of this boom, knows exactly what happened.

"In our view, this was driven by growing investor awareness of Retail Food Group's cheap valuation, following the announcement on 23 December 2022, that the ACCC investigation into misconduct by previous RFG management had been finalised," he said in a memo to clients.

The Retail Food share price remarkably gained 21.2% over December, then another 31.3% in January.

Despite its meteoric rise, Gregory is holding on for further gains.

"Whilst the stock is no longer nearly as cheap as it was before the ACCC announcement, we met with RFG management during the month, and continue to see a positive earnings outlook for the business."

Gregory's optimistic forecast is based on Retail Food's business plans like overseas expansion of Gloria Jeans and growing the number of franchisees for the Donut King, Crust and Gloria Jeans drive-through brands in particular.

"RFG currently has ~700 franchisees," he said.

"However, with the ACCC investigation now behind it, we believe the company is well positioned to grow this key metric which should be supportive for earnings going forward."

RFG is headquartered on the Gold Coast and also runs franchise networks for Crust Pizza, Brumby's Bakeries and Pizza Capers.

The post This ASX share's doubled in 3 months. Expert says it's not too late to buy! appeared first on The Motley Fool Australia.

Are you waiting to pounce on ASX shares that have turned their fortunes around after a terrible 2022?

Why wait when there are already some stocks that fit that bill exactly?

Glenmore Asset Management portfolio manager Robert Gregory revealed two such ASX shares in a memo to clients this week.

Both his examples soared in value over December, but Gregory is convinced that the party has only just started.

Back from the wilderness

Most investors who have held Retail Food Group Ltd (ASX: RFG) in the past would have likely long expunged it from their portfolios.

The stock price, over the past five years, has lost an eye-watering 96% of its value.

The franchisor for brands like Donut King and Michel's Patisserie had been in deep trouble with legal and regulatory issues arising from its relationships with its franchisees.

But then in December, the bleeding suddenly stopped. The share price amazingly rose 21.2%.

"Late in the month, RFG announced the resolution to the long running investigation by the ACCC into misconduct by previous management," said Gregory.

"The outcome was that RFG must pay $8 million to franchisees that were the subject of the misconduct. In addition, RFG agreed to waive $1.8 million of debt to certain franchisees."

Gregory reckoned that the penalties were "broadly in line with investor expectations".

The case had been "a major headwind" for Retail Food with an uncertain timeframe for resolution. But Gregory's team long believed the outcome would not be as severe as how dramatic the decline in share price suggested.

"RFG had been trading on a FY23 PE of ~7x before this announcement," he said.

"With the ACCC investigation now behind it, we believe RFG is well positioned to grow earnings from multiple internal growth initiatives, as well as being better placed to attract new franchisees and commercial partners, which has been impacted by the shadow of the ACCC investigation."

The December stock price surge now has it trading at a P/E ratio of 10, but that's still dirt cheap, as far as Gregory is concerned.

"We continue to see [it] as attractive, given [the] quality of its earnings base and growth prospects."

Still 'cheap valuation' even after tripling stock price

Metallurgical coal producer Stanmore Resources Ltd (ASX: SMR) enjoyed an 8.1% rise last month.

There were no official announcements from the company to the ASX, but Gregory has a theory.

"The stock was likely assisted by the +21% rally in the benchmark hard coking coal price, as well as growing investor awareness of Stanmore Resources' material free cash flow generation and cheap valuation."

In November, the Glenmore team visited Stanmore's site in Queensland.

The trip assured them that the stock is worth holding onto, even after a phenomenal 235% return over the past 12 months.

"The assets acquired from BHP Group Ltd (ASX: BHP) were operating well, with clear scope to be expanded, albeit any material production increases are likely to be in the medium term."

The post 2 December winners ready to rocket further in 2023: expert appeared first on The Motley Fool Australia.

The Retail Food Group Ltd (ASX: RFG) share price is satisfying the appetites of its shareholders today amid its latest update.

As we head into the afternoon, shares in the food and beverage company are trading 10.1% higher at 7.6 cents apiece. The performance is more impressive given the context of the broader market on Friday.

At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is 0.81% weaker than yesterday.

Messy past comes due

Since 2017, Retail Food Group has been shrouded in controversy and contempt. Explosive allegations were made regarding the company's dealings with franchisees following an investigation conducted by The Sydney Morning Herald.

At the time, it was alleged that Retail Food Group failed to provide adequate financial information for the stores being sold to franchisees — among other issues — leading to financial ruin, at times, for those that operated stores such as Michel's Patisserie, Donut King, and Brumby's.

Understandably, the market grew nervous about the situation, sending the Retail Food Group share price into the dirt. In the space of two years, the company's shares descended a crippling 98%.

The reports prompted the Australian Competition and Consumer Commission (ACCC) to commence proceedings against Retail Food Group. Fast forward to today and we have our verdict.

According to the release, Retail Food has agreed to settle with the ACCC. As part of the agreement, the company will pay approximately $8 million to the impacted franchisees. Additionally, the company will waive around $1.8 million worth of franchisee debts.

Retail Food pointed out that the proceeding would be dismissed without:

• making any admission to the allegations
• paying any pecuniary penalty; or
• being subject to any injunction, disclosure, or adverse publicity order

Path travelled by the Retail Food Group share price

It has been a bumpy old ride for Retail Food shares in 2022, swinging between 4 cents and 8 cents. Yet, today's gain takes the company's shares into the green for the year.

In fact, the food and beverage business has outperformed the ASX 200 by approximately 14%. A title that not too many ASX shares can claim to hold at the end of this challenging 12-month stint.

The post It's settled then: Why the Retail Food Group share price is prancing 10% today appeared first on The Motley Fool Australia.

Four ASX shares that have not let that hold them back today are listed below. Here's why they are rising:

AGL Energy Limited (ASX: AGL)

The AGL share price is up 1% to $8.23. Investors have been buying this energy company's shares despite there being no news out of it. However, given the market selloff today, safe haven assets like utilities could be in demand with investors.

Retail Food Group Ltd (ASX: RFG)

The Retail Food Group share price is up 10% to 7.6 cents. This morning, this embattled quick service restaurant operator revealed that it has settled its ACCC proceeding. The Donut King, Gloria Jean's, and Michel Patisserie's operator has agreed to pay $8 million to settle.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price is up 1% to 52 cents. This follows news that the drug developer has received a $7.1 million research and development (R&D) tax incentive refund under the Australian Federal Government's R&D Tax Incentive scheme.

TPG Telecom Ltd (ASX: TPG)

The TPG share price is up 2% to $4.89. Investors have been buying this telco's shares following the release of a bullish broker note out of Morgans this morning. According to the note, the broker has upgraded TPG's shares to an add rating with a $5.50 price target. The broker said: "We think the bad news is now priced in and see value at current levels. We upgrade TPG to an Add recommendation (from Hold)." TPG's shares are still down 17% year to date.

The post Why AGL, Retail Food Group, Starpharma, and TPG shares are rising today appeared first on The Motley Fool Australia.

There is an ASX share that's almost completely wiped out its investors — but one fund manager thinks it could be a bargain buy now.

Collins St Value Fund portfolio manager Michael Goldberg, nominated it as his "out of the box idea" to buy shares in the conglomerate that owns Donut King, Michel's Patisserie, Gloria Jean's Coffees, Brumby's bakeries and Crust Pizza brands.

The trouble is, Retail Food Group Limited (ASX: RFG) stocks went for in excess of $7.50 in 2015 but now trade at 9 cents. That's a 98.8% loss for those poor shareholders.

"This is a company that, due to historical factors, has left a bad taste in the mouth of many investors," Goldberg posted on Livewire.

"Regulatory action being undertaken by the ACCC based on the historical treatment of franchisees and the closure of many shopping centres around the country throughout the COVID-19 pandemic haven't helped matters either."

Incredibly, the fund manager sees the share price at around 15 cents within the next 12 to 18 months. That would be a tidy 67% return.

There are 3 reasons for Goldberg's conviction:

New management improving technology and franchise relations

The 2 biggest problems that pummelled Retail Food's fortunes are now being reformed by a new executive team, according to Goldberg.

"Culture trumps strategy. For a long time, it was questionable if Retail Food Group were getting either right," he said.

"But under the relatively new leadership of Peter George, positive, tangible changes have been made."

The improvements include slimming down the store count from more than 2,500 in 2017 to now 850.

"This is important because the relentless growth pursued by the previous management teams saw far too many franchisees getting burned," said Goldberg.

"Growth needs to be measured, sustainable and done in a way where all stakeholders get a fair slice of the financial pie."

The current leadership also recognises the importance of technology to adapt to the modern world, especially during the COVID-19 pandemic.

"A classic example of this is the way in which Gloria Jeans pioneered drive-through coffee purchases at a time when cafes were under forced closure," said Goldberg. 

"This strategy saw same-store sales actually increase by nearly 20% — offsetting the declining figures from those cafes that weren't able to serve as many customers as usual due to social distancing requirements."

The stock is soooooo cheap right now

Mathematically, Retail Food shares are a bargain, according to Goldberg.

The stock was trading at 7 cents when he made his comments.

"Earnings of 1 cent per share can be cheaply bought based on the 7 cent share price (P/E of 7) and look very favourably priced against other broadly comparable companies such as Domino's Pizza Enterprises Ltd. (ASX: DMP) — 50x, Collins Foods Ltd (ASX: CKF) — 27x and, to an extent, Metcash Limited (ASX: MTS) — 15X."

The fund manager reckons from here that earnings per share can grow at 15% per annum. There is even the "potential" for an 8% grossed-up dividend yield within the next 12 months.

"An obvious catalyst for a re-rating for the stock if ever there was one!"

It can't get any worse

After such a horror half-decade, surely any further news can only be good news, argues Goldberg.

"After all, Australian's love of a good pizza or a doughnut hasn't changed over the last five years – it's the investors who need convincing!"

While the current management is defending the company against the regulatory action from the consumer watchdog, it has signalled its intent to reform.

"They have made a genuine commitment to right the wrongs of the past and it is my view that any news will be good news in terms of settlement figures/timing."

Once the legal proceedings are over, the executive can simply focus on growth, according to Goldberg.

"For some, this may be a difficult story to believe, particularly those who have been on the journey with RFG for some time," he said.

"But the key ingredient in successful value investing is 'being comfortable feeling uncomfortable'. After all, to earn what others don't you have to be prepared to invest where others won't!"

The post Down 99%, this ASX share could now be a bargain buy appeared first on The Motley Fool Australia.

He's the billionaire business partner of Warren Buffett, and vice Chairman of the company they run, Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) (I own shares, for the record).

Yep, he's kind of a big deal.

Not just because he's rich and well connected, though.

The man is smart.

I'm talking Mensa-smart.

Munger is a true polymath; a man who spends more time reading than almost anyone.

He also has a witty turn of phrase, and doesn't mince words.

Charlie is perhaps the man I'd least like to end up debating in a public forum, on any topic.

He's also eminently quotable. There are dozens of lines that, should you use them as investing guidelines, would almost certainly improve your results.

One of his best known is:

"I know I'll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn."

Why?

Maybe it makes us more humble.

Maybe it forces us to review our investing processes a little more carefully.

Maybe it helps our subconscious identify common traits of our losing stocks.

It's probably all three.

As well as being the Motley Fool's Chief Investment Officer in Australia, I run a couple of our investment services, including Motley Fool Share Advisor.

I'm pleased to say that, at the time of writing, our average return is showing the market a clean pair of heels.

Which is important for context, but not the point I want to make.

See, also at the time of writing, here's the return of some of my recommendations:

iSentia Group Ltd (ASX: ISD): -97.48%

Freedom Foods group Ltd (ASX: FNP): -92.62%

Retail Food Group Limited (ASX: RFG): -70%

Reject Shop Ltd (ASX: TRS): -67.14%

I could go on, but I think that's enough nose-rubbing for now, even for a bloke with a larger-than-average schnoz.

I hate those numbers.

They rankle, both professionally, and because I know our members followed that advice and lost money.

Don't tell my wife, but I feel worse about those losses than losses in our own portfolio.

They just downright suck.

They're examples of bad process, bad luck and just plain bad outcomes.

I make no excuses for them. I don't think all were in our control, but that doesn't pay the bills. The money is still lost.

So why don't I give up and go dig holes?

Because, thankfully, they're rare.

And because they're only a small portion of our overall scorecard result.

And, lastly, because we make sure we're diversified.

None of that is an excuse, by the way — I'm not trying to cover up a screw-up by saying 'look over there'.

But — and this is the unfortunate reality — they're going to happen.

If you want to avoid losers, stay in cash.

But good luck building a retirement nest egg that way.

No, if we want decent investment returns, we need to embrace the reality of risk.

There will be times when we will be wrong.

So how do we proceed?

Here's what we try to do at The Motley Fool.

First, we try to avoid stuff-ups.

Sometimes, I've just been plain wrong. For example, I can't blame anyone else for my Isentia mistake. I was just wrong and I have to learnt to accept that It happens.

Fewer of those, in future, is the aim.

But in other cases, we're playing a game of probabilities.

Every company has both growth potential and inherent risk.

The job of the investor, professional and amateur alike, is to find opportunities where we're being offered an outsized return, for the level of risk we're taking.

Or, as Charlie says:

"We look for a horse with one chance in two of winning and which pays you three to one. You're looking for a mispriced gamble. That's what investing is."

See, not a guaranteed winner (there is no such thing), but a bet where the return on offer is significantly greater than the risk.

If I could, I'd just repeat those last two sentences for the rest of this article.

Because, as an investor, if you can't internalise that, you're on a hiding to nothing.

You can't be right all the time.

And if it was possible, the guaranteed nature of the outcome would mean that your return would be almost zero (government bonds, anyone?).

So, while I hate those losses, I've learned to accept them.

For the record, my four largest winners at Share Advisor are +951%, +645%, +460% and +444%.

See the difference?

Now, of course I'd just take the winners and avoid the losers, if that were possible.

But it's not.

So, here's what I do:

I try to keep learning, refining my process as I go.

I make sure I'm diversified, so that one or two losers don't wreck my portfolio.

I remember that investing is a long game.

And — here's the tough love bit — if you only buy one, two or five of our recommendations, I can't help you.

We don't promise success on that scale. We can't. It's not possible, and such a promise would be illegal or at the very least deeply immoral.

I feel terrible about the people that lost money on Isentia.

But I also hope they made more money on other companies than they lost on that bad recommendation.

Statistically, that's likely — and more likely the longer they've been a member and the more of our recommendations they followed.

I don't blame you for being mad when you lose money. Especially on one of our recommendations.

No-one likes losing money.

But, as I said, it's happened before and it'll happen again.

It probably won't feel any better next time, either.

Hopefully, over time and over a diversified portfolio, the winners will outstrip the losers, in both number and size. That's been the experience at Motley Fool Share Advisor and in the vast bulk of our other services.

We have a gameplan that we think is a winner (and has done well for us so far). But just like in sport, you can't win the game with a single play.

You can be dirty about a missed tackle or a knock-on. A bad bounce or a missed shot. But that's not what determines success.

Nor is it decided in the first minute. Or first 5 minutes. Or first 60.

You've gotta play the whole game – the long game!

Fool on!

The post My biggest losers so far appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price is up more than 5.5% today. At the time of writing, the Retail Food Group share price is up 5.6% to $0.075. Shares in the company are in hot demand after Retail Food released its results for the first half of FY21.  

Maintaining a profit despite COVID-19

Earlier today, Retail Food released its results for the first half of FY21.

Despite the impact of the COVID-19 pandemic on retail, Retail Food managed to maintain a profit for the first half.

The company recorded an underlying net profit after tax (NPAT) of $12.0 million. This was a 60% increase on the prior corresponding period (pcp). The result was underpinned by an underlying EBITDA of $14.4 million for the first half of FY21.

However, the true impact of the pandemic was seen in statutory NPAT which fell 72.2% to $3.89 million. In addition, total revenues for Retail Food fell 52.4% to $85.1 million for the first half.

Retail Food acknowledged that the company had received $4 million in Jobkeeper payments and did not declare an interim dividend.

Spotlight on Retail Food divisions

Retail Food noted strong performances for its domestic franchises, Brumby's Bakery and QSR Division (Crust/Pizza Capers).

For the first half, the company's Brumby's Bakery franchises reported an 11.7% increase in sales. In addition, its QSR Division saw sales grow by 6.7% largely due to non-contact meal delivery options.

 According to Retail Food, the sales growth partially offset its brands anchored to shopping centres. Overall, Retail Food saw total network sales for Donut King, Michel's Patisserie, and Gloria Jean's fall 13.2% to $244 million.

How has the share price responded?

Retail Food is Australia's largest multi-brand retail food franchise manager. The company is the owner of notable brands including Donut King, Michel's Patisserie, Gloria Jean's, Brumby's Bakery, Crust Gourmet Pizza, and Pizza Capers.

The company acknowledged that the COVID-19 pandemic presents ongoing challenges for the second half of FY21. However, Retail Food management remains optimistic about the return to less volatile trading conditions.

Retail Food also noted that Federal Court proceedings with the Australian Competition and Consumer Commission (ACCC) had begun. However, the company could not determine the full financial impact of the proceedings.

The post Why the Retail Food (ASX:RFG) share price is 5% higher appeared first on The Motley Fool Australia.

In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a very strong gain. At the time of writing, the benchmark index is up 1.2% to 6,709.3 points.

Four shares that have failed to follow the market higher today are listed below. Here's why they are dropping lower:

Mesoblast limited (ASX: MSB)

The Mesoblast share price was down 2% to $3.77 before being placed into a trading halt. Investors have been selling the biotech company's shares this week following the release of disappointing trial results. Mesoblast requested the trading halt earlier today pending the release of an announcement relating to a corporate update.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price has crashed 19.5% lower to 70.5 cents. This follows the completion of the institutional component of its equity raising. Pilbara has now raised a total of $180 million from institutional investors at a price of 36 cents per share. This represents a massive 59% discount to its last close price. The equity raising has been undertaken to fund the acquisition of the Altura Pilgangoora Lithium Project in Western Australia.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price has fallen 3.5% to $1.72. This follows the completion of a bookbuild which saw two major shareholders sell down their holdings. According to the release, the 54.68 million shares were sold for NZ$1.79 per share, which was higher than the floor price and a discount of 5.3% to its last close price.

Retail Food Group Limited (ASX: RFG)

The Retail Food Group share price is down a further 3.5% to 8.2 cents. Investors have been selling the food and beverage company's shares after the ACCC started proceedings in the Federal Court against it and five of its related entities. The corporate watchdog alleges that the company engaged in unconscionable conduct and made false or misleading representations in its dealings with franchisees.

The post Why Mesoblast, Pilbara Minerals, Pushpay, & Retail Food Group shares are dropping lower appeared first on The Motley Fool Australia.

It has been a disappointing day of trade for the S&P/ASX 200 Index (ASX: XJO) on Tuesday. In late morning trade the benchmark index is down 0.35% to 6,636.4 points.

Four shares that have fallen more than most today are listed below. Here's why they are dropping lower:

Althea Group Holdings Ltd (ASX: AGH)

The Althea share price is down 7% to 45.5 cents after completing a capital raising. The cannabis company has raised $6 million through an institutional placement at a 10.2% discount of 44 cents per share. It will now seek to raise a further $3 million via a share purchase plan. The proceeds will be used to accelerate its growth strategy.

Altium Limited (ASX: ALU)

The Altium share price has fallen 4% to $34.50. This follows its decision to offload its TASKING business for US$110 million on Monday in order to focus on its Altium 365 platform. This morning analysts at UBS retained their neutral rating and $36.00 price target on its shares following the news.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 3.5% to $21.39. Investors have been selling the iron ore producer's shares after the price of the steel making ingredient pulled back overnight. According to CommSec, the spot iron ore price dropped a sizeable 3.9% to US$154.50 a tonne. However, despite this decline, it is still up materially over the last few weeks.

Retail Food Group Limited (ASX: RFG)

The Retail Food Group share price has crashed 23% lower to 7 cents. The catalyst for this was news that the ACCC has commenced proceedings in the Federal Court against Retail Food Group and five of its related entities. The ACCC alleges the food and beverage franchise company engaged in unconscionable conduct and made false or misleading representations in its dealings with franchisees. This is in breach of the Australian Consumer Law.

The post Why Althea, Altium, Fortescue, & Retail Food Group are dropping lower appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price has jumped 4.69% this morning after the company announced it was selling its Dairy Country business.

Retail Food Group's share price is trading at 6.7 cents at the time of writing. In comparison, the broader All Ordinaries Index (ASX: XAO) is down 0.9% to 6,033 points.

Retail Food Group is a global food and beverage company that operates in the bakery/cafe division, coffee retail, and manufacturing and distribution operations.

Since it was established in 1989, Retail Food Group has grown to become Australia's largest multi-brand retail food and beverage franchise owner, servicing more than 1,150 locations.

Dairy Country sale

The company announced it was selling the business and assets of its subsidiary, Dairy Country, to Fonterra Brands for $19.23 million. This is expected to benefit Retail Food Group in a number of ways.

Net proceeds from the sale will be used to extinguish Dairy Country's working capital facility, and to make a further repayment of Retail Food Group's debt obligations. This will free up the company's cash flow and allow it to respond to the evolving retail landscape affected by COVID-19.

Settlement is expected by October 2020, pending net working capital adjustments and conditions such as a foreign investment review board approval.

What did management say?

Executive chair Peter George was optimistic about the sale re-aligning the group's core values and strategic interests. He said:

Dairy Country has represented a reliable past contributor to group earnings, however, is no longer considered an appropriate fit with RFG's strategic intent to focus its resources on the company's core retail food franchising and coffee businesses.

Mr George added the sale would give the company more flexibility within its balance sheet, saying:

The transaction facilitates the company's exit from foodservice and manufacturing pursuits, providing the group with a less complex business model that enables RFG to dedicate its resources towards driving positive outcomes for its franchisee community, and building value for its wholesale coffee business following its FY20 restructure.

About the Retail Food Group share price

The Retail Food Group share price has regained 146% since its March low of 2.6 cents. However, since the beginning of the calendar year, the Retail Food Group share price is trading 35% lower.

The post Why the Retail Food Group (ASX:RFG) share price is up 4% appeared first on The Motley Fool Australia.

The Australian Bureau of Statistics (ABS) has revealed which industries (and ASX shares) could see a bounce after COVID-19.

According to The Guardian reporting, the ABS is looking at Aussie spending habits during the coronavirus pandemic.

The latest survey, conducted in mid-June, is about what Australians are going to spend money on once restrictions are loosened again.

The Guardian quoted ABS head of Household Surveys, Michelle Marquardt, talking about people's spending intentions: "a majority expected to increase their spending on recreational activities (74%), eating out (74%), private transport (73%), personal care (70%), childcare (66%) and public transport (55%)."

What does this mean for ASX shares?

Well it's good to see that people do plan to spend more money when restrictions allow. It is spending that makes the economy tick.

Recreational activities could mean a lot of different things. There are plenty of shares this could be applicable to such as: Ardent Leisure Group Ltd (ASX: ALG), Experience Co Ltd (ASX: EXP), Crown Resorts Ltd (ASX: CWN), Event Hospitality and Entertainment Ltd (ASX: EVT), Ingenia Communities Group (ASX: INA), Star Entertainment Group Ltd (ASX: SGR), Sealink Travel Group Ltd (ASX: SLK) and Village Roadshow Ltd (ASX: VRL).

Eating out would probably benefit the food shares listed on the ASX like Domino's Pizza Enterprises Ltd. (ASX: DMP), Collins Foods Ltd (ASX: CKF), Retail Food Group Limited (ASX: RFG) and Redcape Hotel Group Pty Ltd (ASX: RDC).

You'd think that private transport would be good for shares like Ampol Ltd (ASX: AMP), Viva Energy Group Ltd (ASX: VEA) and Waypoint REIT Ltd (ASX: WPR).

Increased spending on personal care would be good for shares like BWX Ltd (ASX: BWX), McPherson's Ltd (ASX: MCP), Sigma Healthcare Ltd (ASX: SIG) and Australian Pharmaceutical Industries Ltd (ASX: API).

It also looks like it would be good news for childcare related shares like G8 Education Ltd (ASX: GEM), Think Childcare Ltd (ASX: TNK) and Arena REIT No 1 (ASX: ARF).

What about travel?

People are also asked about their travel intentions. The ABS survey revealed that 55% were planning to go on a domestic holiday while less than a third were planning an international holiday.

Of the people planning to take a domestic holiday, 20% intended to go within the following month and another 68% planned to go within the following six months. Most people aren't thinking about an international holiday in the short-term. Of people thinking about an overseas holiday, 44% were thinking about doing it within six to 12 months and 31% were thinking about taking the holiday more than a year in the future.

Shares like Webjet Limited (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN) and Sydney Airport Holdings Pty Ltd (ASX: SYD) are obviously being disrupted by COVID-19 right now, but it'll be pleasing for them that people are thinking about taking domestic holidays.

Do any of these ASX shares look like buys?

I think there's a case for many of the shares hit by COVID-19 if you think about the long-term. Shares should be long-term investments. What happens over the next 12 months shouldn't change your long­-term thinking about a business too much, unless it could go bust. I'm not sure about travel shares at today's prices. The rising case numbers in Melbourne have hurt the prospect of the country being completely COVID-19 free this year, and may limit travel between Melbourne and the rest of the country for a bit longer.

I do believe that shares like BWX, McPherson's, API and Ingenia could be ones to watch over the next couple of years. I'm quite excited by the prospect of the continuing international earnings growth for BWX and McPherson's.

The post ABS reveals which industries (and ASX shares) may rebound hard after COVID-19 appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price is flying today, up 19.67% at the time of writing to 7.3 cents.

Retail Food Group is the company behind several well-known food and beverage brands such as Gloria Jean's, Donut King, Crust, Brumby's, and Michel's Patisserie.

Why is the Retail Food Group share price on the move?

The catalyst behind today's surge appears to be a trading update from the company this morning. In the update, Retail Food Group shed light on recent trading conditions and provided full-year earnings guidance.

In regard to operating performance, the company revealed it has continued to observe an increase in customers within shopping centres as COVID-19 restrictions have been eased:

"Customer count has continued to improve, with recent trading data reflecting a weighted average decline amongst all brands of 13.76% versus the previous corresponding period, albeit this remained well below pre-pandemic levels," said executive chair Peter George.

Mr George noted that only 17 outlets remain temporarily closed in Australia due to the pandemic. While the company is working with impacted franchisees to facilitate re-opening, it expects around 7 of these outlets to be permanently closed.

Additionally, Retail Food Group announced it has secured rent concessions for around 415 outlets. "This is a positive outcome for both franchisees and RFG which provides both cash-flow support and added certainty," said Mr George.

The company also revealed it has completed the restructure of its wholesale coffee business. This has unlocked annualised cost savings of around $6 million per annum.

International franchising division

Shifting gears to its international operations, Retail Food Group stated its international franchise network has experienced a similar improvement in trading conditions as local government restrictions have been eased.

Accordingly, ~150 international outlets are now operating with limited dine-in, while a further ~230 outlets are operating on a takeaway-only basis. However, the company noted that ~138 outlets remain closed, 30 of which will be closed permanently.

FY20 guidance and outlook

Retail Food Group previously withdrew its FY20 earnings guidance in late March in response to the challenges posed by the pandemic.

This morning, however, the company reinstated guidance. Retail Food Group is expecting FY20 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of around $35 million. This compares to underlying EBITDA of $50.7 million in FY19, and pre-pandemic guidance of between $42 million and $46 million provided in October 2019.

RFG also expects its net debt position to stand at approximately $25 million as at 30 June 2020.

Commenting on the company's near-term outlook, Mr George said, "RFG expects trading conditions to remain challenging in the foreseeable term and therefore anticipates a continuation of those measures implemented by the Group in response to the pandemic to support franchisees."

"That said, there are a number of positive developments within the Group's business that provide optimism for the future," Mr George concluded.

Including today's 19.67% jump (at the time of writing), the Retail Food Group share price is down just over 30% year-to-date.

The post Why the Retail Food Group share price is soaring 20% today appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) finished Friday down by 5.3%. The ASX 200 initially opened up strongly after the buoyant day in the US overnight. But between the intra-day high and the low point at the end of the day, the ASX dropped 7.5%.

There hasn't been an end to the number of coronavirus updates today:

More COVID-19 updates

Outdoor retailer Kathmandu Holdings Ltd (ASX: KMD) announced it was shutting all of its stores. Its share price rose 13% today.

The share price of Breville Group Limited (ASX: BRG) rose 1% after withdrawing its FY20 guidance.

The share price of Retail Food Group Limited (ASX: RFG) dropped 9% after giving another update.

The share price of resources business Senex Energy Ltd (ASX: SXY) went up 13.8% after giving an update.

Energy giant Woodside Petroleum Limited (ASX: WPL) gave an update today, which sent its share price down 6.4% by the end of the day.

Home furnishings businesses Adairs Ltd (ASX: ADH) announced the temporary closure of all stores, causing the share price to drop 8.9%.

The share price of aged care business Japara Healthcare Ltd (ASX: JHC) rose 7.7% after the company gave an update yesterday after the market had closed.

More Australian rule changes

The Prime Minister said today that from now on the only children who would be going to school are those that can't get suitable care arrangements.

The hotel industry is going to help with the 14-day quarantining that travellers will need to isolate when arriving back into the state. It's a useful suggestion because many hotels had seen their occupancy fall to below 20%.

States continue to see the number of infections grow, which is why they are implementing more social distancing rules. People have been banned from going to some of Melbourne's most popular beaches.

NIB Holdings Limited (ASX: NHF) looks to help out

Private health insurer NIB has outlined a number of ways it's going to help during this crisis.

NIB will be giving premium relief for people in financial hardship. It has extended coverage for chest, lung, kidney and bladder or other treatment relating to COVID-19 until the crisis passes. People can also suspend their premium payments for six months whilst being covered for COVID-19.

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The post ASX 200 finishes Friday down 5.3% appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price has plummeted more than 9% this morning, as the group becomes the latest ASX company to stand down workers as a result of the coronavirus pandemic.

Shares in the franchise operator have plunged by more than two thirds since February and are now trading at just 3 cents. 

Workers stood down

Retail Food has implemented a reduction in total working hours across the group by either standing down, or reducing the working hours of the majority of its team members. The company said additional operational and workforce planning measures were necessitated by the rapid escalation of measures by Australian governments to slow the spread of coronavirus as well as the current uncertainty regarding the duration and impact of the pandemic on its operations. 

Retail Food Group owns a host of food franchises including Michel's, Gloria Jeans, Crust, Donut King, and Brumby's. The company also roasts and supplies coffee products under its Di Bella Coffee brand. The group said today's decision was made to safeguard as many jobs as possibly over the longer term and preserve and protect the sustainability of the franchise network. 

Operational performance 

From an operational perspective, Retail Food advised that Brumby's performance has continued to exceed expectations over the past few weeks. Recent trading data, however, indicates a significant reduction in customer count across the group's domestic franchise network. Those outlets situated in shopping centres have been the most acutely impacted by the community response to the coronavirus outbreak and increasingly stringent measures by governments to combat it. 

There is a strong link between Retail Food's performance and that of its franchise network, which has been impacted by rapid change in the retail market. 

Executive Chairman Peter George commented:

A large majority of our franchise partners are facing an extremely difficult trading environment, particularly within shopping centres, as consumers react to increasingly onerous measures taken by the government, and of course are focused on more immediate issues such as their and their family's health and safety.

Retail Food said it was necessary to make a long term and pragmatic approach to best assure the future sustainability of its franchise network for all stakeholders. It said it was necessary to ensure its costs were reduced to match anticipated revenues for the foreseeable future, and to best position the group and its franchise network for a return to less challenging times. 

The company said it remained focused on providing support to its franchisees, including financial assistance to those that require it most. It is continuing to monitor actions taken by governments in the markets it operates in and the potential impact on the business. 

George said, "where it is necessary to take additional action to further insulate the Group and its franchise community from this rapidly evolving situation we will do so."

The post Retail Food Group shares plunge 9% as workers stood down appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price is up by 9.7% so far today after the market reacted favourably to the food and beverage company's 1H20 results.

Significantly improved underlying results

Retail Food Group reported 1H20 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $31.7 million. This represents a very healthy 32.6% increase on the previous corresponding period (pcp) of 1H19.

Statutory EBITDA came in at $50.1 million which was a significant improvement of 144.5% on the pcp. However, the company pointed out that this result recognises a $71.8 million gain on debt as part of its recent recapitalisation.

Meanwhile, Retail Food Group reported statutory net profit after tax (NPAT) of $14.3 million. This was a big turnaround from the $111.1 million loss the company reported in 1H19.

Strategy update to improve franchisee performance

Retail Food Group commented that this strong 1H20 result reflected growing traction from turnaround initiatives that commenced during FY19. In particular, the company noted it has addressed the debt burden which represented a major threat to its future. This was achieved through a company-wide capital restructure that was completed at the end of last year.

The group has been maintaining an ongoing focus on improving its domestic franchise business performance. This has included maintaining targeted $30 million gross margin generation at the franchisee level.

Retail Food Group has also reported early success from targeted marketing and product initiatives, including reductions in cost of goods and lease negotiation assistance provided to franchisees.

In addition, the group has been driving franchisee engagement and support. Retail Food Group has also made a number of key executive appointments to drive initiatives and improve its franchisee performance.

FY20 outlook

Retail Food Group has maintained its guidance of FY20 underlying EBITDA in the range of $42 million to $46 million. This guidance assumes full-year contributions from all continuing operations and excludes the impact of AASB 15 and 16 accounting changes.

The group also stated that its FY20 cost out plan is on track which is targeting around $8 million to $9 million per annum cost savings.

Commenting on the group's 1H20 results, Executive Chairman Peter George said:

"The Company remains focused on achieving its vision of becoming a respected leader in both the domestic and international retail food and beverage arenas."

"Central to that goal is an unwavering commitment to our franchisees, and providing them, along with our internal teams, with the tools to better support them in more strategic, long term ways," he added.

The post Here's why Retail Food Group shares are surging 10% higher today appeared first on The Motley Fool Australia.

Shares in KFC merchant Collins Foods Limited (ASX: CKF) won't stop rising as the franchisor's entrepreneurial approach helped adjusted net profit lift 15.7% to $45.7 million over fiscal 2019.

This translated into total dividends climbing 14.7% to 19.5 cents per share as KFC same-store sales in Australia grew 3.7%.

One fly in the ointment is the group's leverage with net debt of $212.5 million on 1.87x fiscal 2019's EBITDA a level high enough to mean the business is higher up the risk curve.

Today the group announced that it has managed to "refinance" its bank debt facilities to limits of $265 million and €80 million. It also reported $210 million and €52 million of the new facilities  will be drawn on financial close.

The post The Collins Foods share price is up 70% in 2019 and KFC is going à la carte appeared first on The Motley Fool Australia.

It often pays to see what short-sellers are up to as the level of bearish bets can often have a significant short-term bearing on the performance of ASX stocks.

While investors often pay attention to the most shorted stocks on the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index, they often neglect to look at stocks where short-sellers are beating a hasty retreat.

Short-selling is the game of selling a borrowed stock in the hope of buying it back at a lower price later to profit from the difference. Short-sellers tend to be more sophisticated compared to the everyday investor – although they don't always get their bearish calls right.

In that respect, I suspect looking at companies that have recorded a big decline in the number of shares out on loan to short-sellers (called short-interest) could prove to be a more accurate sign of when a stock will recover.

Biggest drop in short-interest

The stock that recorded the biggest drop in short-interest this month is building materials and services group Wagners Holding Company Ltd (ASX: WGN).

The amount of WGN shares shorted fell 169 basis points to 1.62% as at July 15 (ASIC data is always one week behind).

Shareholders will be hoping that the loss of interest of short-sellers will mark a turning point for the stock, which was trading at over $4 a year ago and is currently fetching $1.85.

Short-sellers losing their appetite

Short-sellers are also rushing for the exits in Retail Food Group Limited (ASX: RFG). Short-interest in the embattled food franchisor, which owns brands like Gloria Jean's Coffees, Brumby's Bakeries and Donut King, fell 81 basis points since the start of July to just 0.43% as of last Monday.

Chatter about of possible white knight riding to the rescue for the scandal-ridden group has undoubtedly contributed to the short-selling exodus.

The Sydney Morning Herald reported that Soliton Capital is considering injecting $100 million or more to help Retail Food Group repay debt due in the third quarter of this year.

I would be reluctant to join the bulls in buying the stock but those with a higher tolerance for risk may be willing to make a punt.

Steeling for a recovery

The third notable stock gaining ground against short-sellers is the BlueScope Steel Limited (ASX: BSL) share price.

Short-interest in the steel products maker fell 65 basis points this month to 0.41% as an improving outlook for US steel prices have prompted bearish traders to take profit and close positions.

While the Bluescope share price is still down by more than 30% over the past year, it has enjoyed a significant bounce in the last month or so.

I think the stock looks cheap and I believe it will continue to outperform over the short to medium-term.

The post ASX stocks that could outperform as short-sellers capitulate appeared first on The Motley Fool Australia.

The Retail Food Group Limited (ASX: RFG) share price rose 29.4% yesterday, seemingly after a news.com.au interview with Retail Food Group CEO Peter George that outlined Mr George's future plans for the company was published on Friday.

The ASX issued a 'please explain' to the company after RFG shares jumped from the 14 cent level it was trading at opening on Friday to the high of 22 cents reached yesterday, with the exchange operator also noting a "significant increase in the volume of RFG's securities traded from Friday 5 July 2019."

Retail Food Group responded yesterday afternoon by stating that it was unaware of the cause or reasons behind the move and pointing to the interview published on Friday as the probable cause of the price movements: "RFG notes the publication of media articles in the News Limited press on Friday 5 July 2019 in relation to the implementation of the turnaround strategy for RFG, previously advised to the Market."

Although insisting that the information released in the interview was already public knowledge, RFG has also re-confirmed to the ASX that "it is exploring a range of options to reduce debt, including the potential sale of non-core assets as well as equity and other debt funding proposals. Discussions in relation to these matters are advanced and a further update will be provided to the Market in due course."

RFG shares have fallen almost 98% since its all-time high of $7.56 (reached in February 2015), after a series of revelations regarding franchise mismanagement came to light.

The post Why Retail Food Group shares rose 30% yesterday appeared first on The Motley Fool Australia.

At the time of writing the Retail Food Group share price is almost 2.5% to 22 cents.

What was reported?

The media outlet revealed that Retail Food Group "instructed Michel's franchisees to ignore expiry dates on packaging and adopt a new shelf-life extension date, ranging between two and six months."

This includes extending the use-by date on chocolate cakes by three months and spinach and feta scrolls by two months.

Retail Food Group response.

This morning the company responded to the media reports and defended its actions.

According to the response, the company "follows strict standards with regard to food quality and any product extension was granted following written approval from the supplier and with consumer safety top of mind."

However, it has decided to withdraw any products which have received use-by extensions from its suppliers.

It added that over the last 18 months, the company's brands have "engaged with less than 1 per cent of its supplier network to request possible shelf life extension where appropriate and safe to do so. These extensions related to c.0.25% of RFG's annual spend with its supplier network."

It also stressed that it has not been contacted by regulators in regard to concerns over its food safety standards.

What now?

Whilst the company may ultimately have not done anything wrong here, I feel this negative media coverage has damaged its brand even further now.

As well as putting off consumers from visiting its struggling stores, I suspect that would-be franchise buyers will also be put off by these reports. As franchise sales are the life-blood of the company, things look increasingly bleak in my opinion.

In light of this, I would urge investors to stay clear of Retail Food Group and focus on other options in the food space such as Costa Group Holdings Ltd (ASX: CGC) or Domino's Pizza Enterprises Ltd (ASX: DMP).

The post Retail Food Group share price lower after admitting to extending use-by dates appeared first on The Motley Fool Australia.