SWIM STAR JUMPS ON BOARD TO HELP OUT
Retailer crashes amid concerns of accounting change
RETAIL Food Group shares slumped to a 16-month low yesterday on concerns new accounting standards will boost debt levels on its balance sheet.
The new International Financial Reporting Standards means retailers such as RFG will have to recognise as a balance sheet liability, rental payments over the entire term of a lease. The shares lost 59c, or 11.3 per cent, to $4.63 yesterday.
UBS has cut its share price target on the Gold Coast-based owner of the Gloria Jeans, Brumby’s Bakery, Donut King and Crust Pizza chains by 18 per cent to $4.70.
The brokerage said it expected RFG’s subleases to be consolidated on to its balance sheet in addition to its other operating leases.
It said the change could add $105 million in lease debt. While RFG’s cash flow wouldn’t be affected, “any increased disclosure could highlight that the company is liable for lease payments should a franchisee come under financial difficulty,” UBS says. MICHAEL Phelps, the most decorated athlete in Olympic history, has joined the board of an Australian-listed medical technology company that has developed a test for depression.
Medibio said the American swimmer , who retired from competition in 2016 with a haul of 28 Olympic medals, is one of its newly appointed directors.
The swim star said he has used Mediobo’s technology — which analyses biomarkers including heart rate, body clock, and autonomic nervous system to detect and help manage mental health disorders. Mr Phelps says he believes the technology can make a profound impact in diagnosing mental health issues and empowering people to seek help.
“In sports, there is so much focus on the physical aspects of performance and athletes are analysed from head to toe,” Mr Phelps said.
“But for many athletes, mental health has not been a topic of focus, and the data analysis aspect of it has been missing up until now.”
Mr Phelps said he had faced mental health challenges since he was a teenager but only recently got treatment and support after becoming desperate.
Medibio’s technology is based on 15 years of research at the University of Western Australia, while test and clinical studies continue at the Johns Hopkins University School of Medicine in the United States and the University of Ottawa in Canada.
Shares in the Sydney-based company rallied 3¢ or 10 per cent to 33¢ yesterday.
Hunter Green Institutional Broking director Charlie Green said the changes meant retailers with many outlets would have to recognise the cost of leases over a longer period.
“For a retailer with a fiveyear lease, the contingent costs over the entire five years will have to showon the balance sheet not just the payments actually made,” Mr Green said.
He said while the changes would not affect the actual cash flowing through a business, it could have an impact on retailers with higher debt.