De-Risked Funding and Cost-Outs Underpin RFG’s Medium-Term Recovery Upside

In a report released yesterday, from PAC Partners maintained a Buy rating on Retail Food Group, with a price target of A$2.50.

PAC Partners has given his Buy rating due to a combination of factors that balance near-term earnings pressure with improved balance sheet flexibility and medium-term cost benefits. The refinancing of the Soul Pattinson facility secures funding out to August 2027, provides extra capacity to back the Enhance and Grow strategy, and removes a key financing overhang, even though it comes at a higher margin. At the same time, the company’s updated guidance for 1H26 EBITDA reflects a reset from one-off benefits last year and softer trading from Beefy’s outlets, but still supports a solid full-year EBITDA outlook in the $20–$24m range.
Cost-reduction programs are expected to deliver meaningful savings, with initial benefits in FY26 and a larger uplift in FY27, which underpins margin improvement beyond the current year. PAC Partners notes that its own forecasts already sit within the company’s guided range, so only modest model adjustments are required and the $2.50 per share price target remains intact. With the de-risked funding profile, clearer earnings visibility, and self-help via cost-outs, the broker believes the current valuation does not fully reflect RFG’s medium-term recovery potential, justifying the continuation of a Buy recommendation despite the high-risk classification.