When there is despair people find every reason to sell, when there is euphoria people find every reason to buy.
RFG has a good underlying business, with the bad apples currently being picked away.
2018 H1 net (before 1 off writedown) of $24.7m was a net profit margin of almost 15%.
Sure.....there will be more restaurant closures and emotional selling to hit the share price, coupled with reduced earnings again as i think franchisees will bw given back some of the pie.....but you have a company that still has good metrics.
1. Should post roughly $20m net profit in H2 2018. That's a forward PE ratio of less than 5.
2. Cost savings implementation to scrape $10m back.
3. International expansion.
4. Dividend suspension. GREAT news!! Save those millions to reduce debt and sweeten failing restaurants in AUS. 2017 dividends were $52m, this money should mostly be used to grow the company.
I think this is an acceptable investment (not a trade) and will be adding to my portfolio.
Coffee or pizza anyone?
When there is despair people find every reason to sell, when...
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