RFG ’worst performing stock’

TROUBLED Retail Food Group (RFG) was the worst performing stock on the ASX 200 this year amid allegations many of its franchisees were struggling to survive.

The Gold Coast-based operator of the Gloria Jean’s, Michel’s Patisserie and Donut King chains slumped 64.8 per cent to close out the year at $2.47 yesterday. It started the year at $7.075. That compares to a 7.1 per cent gain for the ASX 200.

Since December 9 when Fairfax reported that unhappy RFG franchisees were struggling to cope with rising fees and other costs, the stock has slumped 43 per cent.

RFG managing director Andre Nell denied the allegations but said the company was now working with franchisees to help them cope with a challenging retail environment. The company warned earlier this month that first half profit would drop 34 per cent.

Mr Nell said shopping malls, where many RFG outlets are located, were facing falling customer numbers even as rents were increasing.

Pitcher Partners director of wealth management David Lane said he did not see RFG’s share price recovering any time soon given recent concerns over its financial performance.

RFG announced earlier this week that it had extended the life of its $150 million debt facilities beyond December 2018, allaying some concerns about its future.

The news has led to recent gains for the stock.

Yesterday shares were up 10 or 4.2 per cent to $2.47.