Far-reaching impacts tipped
they’re receiving will be assessable, they won’t be able to claim any expenses such as interest rates or land tax.
“The inability to claim holding costs will have a significant and far reaching impact.”
Mr Whitehead said when his firm discussed the proposed new legislation with clients, they were unaware of the imminent changes or their possible impact.
“With much of regional Queensland in severe drought and our farmers already struggling, I have major concerns in particular for those primary THE company behind chains including Donut King and Brumby’s Bakery expects to close more than 120 stores by the middle of next year as it attempts to drag itself out of financial strife.
Retail Food Group, which also operates food chains Michel’s Patisserie and Pizza Capers, has moved to tap investors for $160 million to fund a turnaround plan.
Shares in the group were placed in a trading halt yesterday as it prepared to issue 1.5 billion shares at 10c each to raise $150 million.
Retail Food will attempt to raise a further $10 million through a share purchase plan at the same price, which represents a 41 per cent discount to its last closing price of 17c.
Net proceeds of the fundraising will be used to pay down a debt pile producers who have borrowed money to buy a block of land which they’re renting out to a third party – their interest could end up being a substantial amount of money,” Mr Whitehead said.
“While the intention of the legislation seems to be to stop people in the capital cities from land banking, it has got other far reaching and unintended consequences which will have an adverse impact, particularly for those in regional areas.”
The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No 1) Bill 2019 which stands at $260 million. The cash will also provide working capital to support a turnaround plan after a horror two years.
Retail Food has also revealed plans to close another 127 stores – not including mobile cafe vans – throughout this financial year.
The latest closures follow it shutting 330 stores in the year to June.
The group said it would open 15 stores this financial year, leaving it a network of about 830 outlets.
It did not provide a breakdown of which brands and locations will get the chop.
Retail Food has suffered huge losses amid wide-ranging reputational and regulatory issues that started in 2017 when it was accused of badly treating franchisees.
Its shares had been worth more than $7 at the start of 2017 but slumped to an all-time low of 12.5c in is currently before the Senate.
Mr Whitehead said PVW Partners had written to Queensland Senator Susan Mcdonald seeking urgent consideration of changes to the legislation.
He said PVW Partners advocated that people earning income from a property should be able to claim any expenses related to that property, regardless of whether they were carrying on a business.
As a minimum, they should be able to at least claim expenses up to the amount of income received, he said. June. The group posted a $150 million loss in 2018-19 after another poor year, driven by $185.3 million in impairments and provisioning expenses.
This followed an impairment-driven loss of $306.7 million in the prior year.
Executive chairman Peter George yesterday flagged the group was yet to bottom out, with underlying earnings likely to be in a range of $42 million to $46 million for this financial year.
That would be a decline of between 9.3 per cent and 17 per cent on the $50.7 million the group reported for the year to June.
The underlying measures strips out one-offs such as asset writedowns or sales.
The company said its fundraising announcement was one plank of a wider recapitalisation plan that involved repaying $118.5 million in debt.
The banks have also agreed to write down $72 million of the company’s senior debt as part of a new $75.5 million loan.
The placement bookbuild opened yesterday and is scheduled to close on Monday.