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Retail Food Group (AU:RFG)
ASX:RFG

Retail Food Group (RFG) AI Stock Analysis

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AU

Retail Food Group

(Sydney:RFG)

Rating:55Neutral
Price Target:
AU$2.00
▲(10.50%Upside)
Retail Food Group is in a recovery phase with positive revenue and profit margin trends. However, challenges remain in achieving consistent profitability and cash flow stability. The stock's technical indicators suggest a lack of strong momentum, and while the valuation is fair, the absence of a dividend yield is a minor drawback. The company needs to focus on improving profitability and consistency in financial performance.

Retail Food Group (RFG) vs. iShares MSCI Australia ETF (EWA)

Retail Food Group Business Overview & Revenue Model

Company DescriptionRetail Food Group (RFG) is a global food and beverage company headquartered in Australia, primarily engaged in the development and management of franchise systems. The company operates across multiple sectors including coffee, bakery, and quick service restaurants, with a portfolio of well-known brands such as Gloria Jean's Coffees, Donut King, Brumby's Bakery, and Michel's Patisserie. RFG focuses on delivering high-quality food and beverage products to its customers through a network of franchised and company-owned outlets, both domestically and internationally.
How the Company Makes MoneyRetail Food Group generates revenue primarily through its franchising model, where it earns income from franchise fees, royalties, and sales of products to franchisees. The company charges upfront fees for granting franchise rights and ongoing royalties based on a percentage of franchisee sales. Additionally, RFG supplies ingredients, consumables, and equipment to its franchisees, creating another revenue stream. The company also operates some outlets directly, generating income from direct sales. Strategic partnerships and supply agreements further bolster RFG's earnings by expanding its product offerings and market reach.

Retail Food Group Financial Statement Overview

Summary
Retail Food Group is experiencing a recovery phase with improvements in revenue growth and gross profit margins. However, challenges remain in maintaining consistent profitability and cash flow stability. The balance sheet shows moderate leverage and a healthy equity base, but with low ROE, indicating a need for better profitability and cash flow management.
Income Statement
56
Neutral
Retail Food Group has shown improvement in revenue with a growth rate of 12.4% from 2023 to 2024, which is a positive indicator. Gross profit margin improved significantly to 71.8% in 2024, up from 48.8% in 2023. However, the company is struggling with profitability, as indicated by negative EBIT margins in recent years, although there was a positive turnaround in net income in 2024, showing a net profit margin of 4.6%.
Balance Sheet
48
Neutral
The company's debt-to-equity ratio is 0.55 in 2024, which indicates a moderate level of leverage. The equity ratio stands at 56.4%, reflecting a healthy proportion of equity financing. Return on equity (ROE) is 2.8% in 2024, which shows slight improvement but remains low, indicating limited effectiveness in generating profit from shareholders' equity.
Cash Flow
60
Neutral
Operating cash flow turned positive in 2024, showing a substantial recovery from negative figures in 2023, which is a good sign. The free cash flow to net income ratio is 1.78, indicating strong cash generation relative to net income. However, historical fluctuations in cash flow metrics suggest some instability in cash flow management.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
136.81M125.18M111.37M102.58M109.10M126.40M
Gross Profit
76.14M90.88M54.38M50.77M52.19M47.69M
EBIT
9.74M-1.90M-13.21M2.19M9.03M-10.79M
EBITDA
24.90M26.58M1.42M19.28M24.52M48.11M
Net Income Common Stockholders
8.90M5.79M-8.95M5.26M1.46M-3.99M
Balance SheetCash, Cash Equivalents and Short-Term Investments
21.43M20.64M22.26M29.22M34.65M40.25M
Total Assets
374.67M368.74M348.89M350.08M369.76M437.50M
Total Debt
112.89M113.62M110.64M128.42M153.38M177.66M
Net Debt
91.46M93.00M88.37M99.20M118.73M137.42M
Total Liabilities
158.95M160.73M149.18M166.30M191.91M261.41M
Stockholders Equity
215.71M208.01M199.71M183.78M177.86M176.09M
Cash FlowFree Cash Flow
13.05M10.32M-4.93M12.34M8.41M-5.79M
Operating Cash Flow
18.06M15.36M-1.20M15.43M11.07M-3.83M
Investing Cash Flow
-4.38M-9.91M-2.21M-828.00K1.88M-279.00K
Financing Cash Flow
-13.23M-7.09M-3.61M-20.24M-18.43M31.09M

Retail Food Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price1.81
Price Trends
50DMA
1.84
Negative
100DMA
1.95
Negative
200DMA
2.34
Negative
Market Momentum
MACD
-0.02
Positive
RSI
49.89
Neutral
STOCH
42.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:RFG, the sentiment is Neutral. The current price of 1.81 is below the 20-day moving average (MA) of 1.81, below the 50-day MA of 1.84, and below the 200-day MA of 2.34, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 49.89 is Neutral, neither overbought nor oversold. The STOCH value of 42.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:RFG.

Retail Food Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUMTO
79
Outperform
AU$183.78M10.818.49%6.02%3.76%-26.42%
AUCKF
68
Neutral
$899.45M17.8112.25%3.54%4.74%57.58%
62
Neutral
$6.88B11.322.90%3.87%2.70%-24.57%
AUGYG
61
Neutral
AU$3.03B-1.13%26.77%51.19%
AURFG
55
Neutral
$113.90M12.634.31%21.87%
AUDMP
54
Neutral
$2.01B121.642.09%5.04%-8.04%-54.44%
AUOLI
37
Underperform
€3.24M
5.92%-333.33%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:RFG
Retail Food Group
1.81
-0.79
-30.38%
AU:CKF
Collins Foods
7.63
-1.37
-15.18%
AU:OLI
Oliver's Real Food Ltd.
0.01
>-0.01
-23.08%
AU:DMP
Domino's Pizza Enterprises Limited
21.30
-16.03
-42.94%
AU:MTO
Motorcycle Holdings Ltd.
2.49
1.36
120.35%
AU:GYG
Guzman y Gomez Ltd.
29.47
0.47
1.62%

Retail Food Group Corporate Events

Retail Food Group Issues Unquoted Service Rights to Employees
Mar 18, 2025

Retail Food Group Limited announced the issuance of 29,385 unquoted service rights under an employee incentive scheme, effective March 18, 2025. This move is part of the company’s strategy to incentivize employees, potentially impacting its operational efficiency and aligning staff interests with corporate goals.

Retail Food Group Issues Performance Rights to Employees
Mar 18, 2025

Retail Food Group Limited has announced the issuance of 47,945 performance rights as part of an employee incentive scheme. These unquoted securities are not intended to be listed on the ASX, reflecting the company’s strategy to incentivize and retain key personnel, which could enhance operational performance and stakeholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.