RETAIL FOOD GROUP LIMITED (ASX: RFG)

Up 27.1% on June 29, 2018, Retail Food Group Limited (ASX: RFG) is seen to be in the revival zone while the group updated the market about its Debt Facilities. The Board unveiled that the lenders are ready to waive off the testing of the financial covenants under the Company’s senior debt facilities with respect to the period ending 30 June 2018.

However, RFG will be subject to additional reporting obligations under the agreement covering the waiver. Notwithstanding the lenders’ agreement to provide a waiver with respect to testing of the covenants at that date, the Board remains focussed on the Company’s balance sheet position. RFG is also evaluating alternatives to reduce balance sheet leverage, and would not hide away from any potential asset sales to manage the scenario.
The embattled group that was lately removed from the S&P/ASX 200 Index effective at the Open on June 18, 2018, will provide further update to the market in due course.

Its just a few days only that the group provided an update on FY18 earnings. The Group now expects FY18 underlying NPAT to be approximately $34.5 million and statutory NPAT to be a loss of approximately $87.6 million. This has been given the impairment charges booked at 31 December 2017. The group further mentioned about the trading performance getting aggravated by a combination of persistent difficult retail market conditions, impact from planned domestic outlet closures, and ongoing negative sentiment on retail franchising and RFG. The termination payments to former Managing Director, Andre Nell, and other additional one-off turnaround expenses have also been flagged to impact the profit. Meanwhile, RFG has maintained its discussions with its bankers and advisers with respect to FY18 result and forecast FY19 result in view of the banking position. The Group is due to announce its FY18 results in August 2018.

The stock traded at the current price of $ 0.540, as at June 29, 2018.

 
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