Fund Manager Summary on Retail Food Group Ltd (ASX:RFG)
In December 2025, Collins St Asset Management commented that Retail Food Group Ltd (ASX:RFG) has rebuilt and returned to growth in 2025—launching a new brand and delivering revenue growth of 13% and EBITDA growth of 2%—but remains undervalued at about 8x 2026 earnings with potential to rerate to 12x given likely catalysts such as a reinstated dividend and continued accumulation by Riguad/United Petroleum. Overall, fund manager commentary on RFG weighs recent constructive signals more heavily: managers note a multi-year turnaround marked by portfolio rationalisation, strengthened franchise relationships and renewed unit growth (RFG reporting about 750 domestic stores mid‑2025 and ~1,200 stores globally by late 2025), but they also flag material risks including residual restructuring costs that have muted EPS and a mid‑2025 trading setback plus a CEO resignation that prompted at least one manager to sell; strategic considerations include a concentrated >20% stake held by the Hirsch/United group and potential synergies with United’s retail network (notably Pie Face), which increase the likelihood of corporate activity, while actionable drivers to monitor are dividend reinstatement supported by A$51 million in franking credits, execution of franchise roll‑out (including Firehouse Subs), margin recovery post‑restructuring, and whether market multiple expansion occurs toward peer levels (managers previously cited peers at ~15–20x and historic commentary estimating 8.5x).
Commentary From The Managers
There are 7 insights from 2 fund managers regarding their investment in Retail Food Group Ltd (ASX:RFG) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Collins St Asset Management
31 Dec 2025
$1.48
Summary
- Collins St Asset Management believes RFG is undervalued and increased their position because the company has completed restructuring, returned to growth, and identifiable catalysts plus a valuation gap imply meaningful upside.
- RFG is Australia’s largest multi-brand food franchise group, operating 11 brands across 1,200+ stores worldwide.
- After five years of rebuilding franchise relationships and rationalising the portfolio, RFG shifted back to growth in 2025 with the launch of its first new brand in years, Firehouse Subs.
- Recent performance: revenue +13%, EBITDA +2%; residual restructuring costs have muted EPS, but the business is now positioned for sustained expansion.
- Valuation view: the stock trades at ~8x 2026 earnings (around $1.50); Collins St considers 12x more appropriate, implying a target of $2.25.
- Key catalysts for 2026: a likely reinstated dividend, supported by $51 million in franking credits, which could spotlight value.
- Another catalyst is accumulation by Riguad Pty Ltd (associated with Eddie Hirsch and United Petroleum), now holding >20%, suggesting possible strategic intent.
- Synergies between United’s retail network and RFG’s brands—particularly Pie Face—make the Riguad stake intriguing as a potential value-unlocking pathway.
- The combination of completed restructuring, renewed growth, attractive valuation and clear catalysts underpins Collins St Asset Management’s conviction in the investment case.
Renaissance Asset Management
30 Sept 2025
$1.33
Summary
- Renaissance Asset Management believes disappointing results and the CEO's resignation materially changed RFG's outlook and sold their investment because these developments undermined the franchise's operational stability and visibility.
- Earnings and guidance: downgraded earnings and weak same-store sales reduced confidence in medium-term cashflows.
- Franchisee relations: escalating disputes and franchisee cash stress threaten revenue sustainability and brand strength.
- Governance and management: loss of CEO credibility and governance lapses increased execution risk and the potential for further senior turnover.
- Balance sheet & liquidity: tightening working capital, potential covenant pressure, and fundraising risk raise the likelihood of value dilution.
- Operational complexity: a fragmented franchise model and uneven unit economics limit visibility on recovery timing.
- Valuation vs risk: the current price did not compensate for heightened operational and governance risks, prompting reallocation.
- Exit and follow-up: sold the position to preserve capital and redeployed into higher-conviction ideas; will monitor for clear governance fixes, improving franchisee relations, and restored cashflow before reconsidering exposure.
Collins St Asset Management
30 June 2025
$2.01
Summary
- Retail Food Group (ASX:RFG) has successfully turned its business around after past challenges.
- Over the last few years, RFG has refined its offering and exited underperforming sites.
- The company now operates 750 stores domestically under core brands such as Donut King, Gloria Jeans, Brumbies, and Crust Pizza.
- Improving customer sentiment has attracted new interest from substantial and strategic holders.
- The most notable new holder is United Petroleum, which has increased its stake from 10% in June 2024 to 21% by June 2025.
- RFG management has acknowledged synergies between their brands and United Petroleum, although no formal approaches have occurred yet.
- As United Petroleum continues to accumulate shares, corporate activity is anticipated.
- Collins St Asset Management believes RFG is trading too cheaply, with an estimated earnings multiple of 8.5x compared to peer multiples of 15-20x.
Collins St Asset Management
31 Dec 2024
$2.55
Summary
- Collins St Asset Management highlights RFG as a fundamentally good company despite its checkered past.
- The market's recognition of RFG's intrinsic value is deemed crucial to prevent competition from capitalizing on this.
- In the last six months, Thorney Investment Group and United Petroleum Group have entered RFG’s registry, indicating growing investor interest.
- United Petroleum currently owns 19.9% of RFG, and Thorney owns over 5%.
- There are no guarantees about future developments; however, Collins St Asset Management remains optimistic about 2025.
- Positive expectations are indicated for many of the fund’s holdings.
Collins St Asset Management
30 June 2023
$2.28
Summary
- Collins St Asset Management first bought Retail Food Group (RFG) in 2021, anticipating post-Covid normalization to benefit the company.
- Belief that RFG was priced cheaply due to the overhang of an ACCC case related to past management issues.
- Pleased with management's strategic pivot, being selective in new franchisee acquisitions.
- RFG has made lasting adjustments to adapt to the new normal, such as launching a virtual ribs business, "Rack’em Bones BBQ Ribs".
- This initiative utilizes existing pizza ovens during downtime to create additional cash flows and profits.
- Continues to appreciate the positive cultural change and future growth prospects, both locally and internationally.
- Observations of insider stock purchases indicate confidence in the company's future.
- Currently trading at 7.5x 2024 earnings, suggesting significant upside potential for Retail Food Group.
Collins St Asset Management
31 Dec 2022
$3.48
Summary
- Collins St Asset Management first invested in Retail Food Group in 2020 during a turnaround phase.
- Two key factors identified:
- Return to post-Covid normal with a focus on local coffee and cake shops.
- Removal of overhang related to ACCC actions against previous management.
- Resilience of the company’s brands has been surprising, with successful strategies like shrinking to greatness.
- Brands such as Gloria Jean's (11% growth in 2022) and pizza offerings (10% growth in 2022) continue to grow despite challenges.
- Investor disinterest linked to litigation overhang and costs of settlements.
- Initial speculations regarding settlement costs were as high as $30 million, but final agreement was under $10 million.
- With regulatory overhang removed, there is optimism for continued company growth.
- Collins St Asset Management believes RFG’s share price will be driven by fundamentals rather than peripheral issues.
- Despite uncertainty regarding future progress, there is still a belief in profit potential even at current levels of 9c.
Collins St Asset Management
31 Mar 2021
$2.92
Summary
- Collins St Asset Management views RFG as a franchise business owning brands like Gloria Jean’s, Brumby’s, Donut King, and Michel’s Patisserie.
- RFG faced multiple challenges leading to a significant drop in share price, from $1 to as low as 2.6c during the Covid crash.
- The decline was exacerbated by previous management's mistreatment of franchisees, prompting intervention from the ACCC.
- Collins St Asset Management believes the market is overestimating the potential costs of ACCC action.
- There is confidence in the strength of a post-Covid recovery for RFG’s brands.
- At 6.5c per share, Collins St Asset Management perceived RFG as a bargain and acquired over 5% of the company.
- If RFG meets consensus earnings expectations of 1c per share next year and reinstates dividends within two years, the company is considered undervalued.
- Collins St Asset Management remains optimistic about the eventual market realization of RFG's true value, which they believe is over twice their purchase price.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Retail Food Group Ltd (ASX:RFG)?
Fund managers including Collins St Asset Management and Renaissance Asset Management have invested in Retail Food Group Ltd (ASX:RFG).
Why do fund managers invest in Retail Food Group Ltd?
Fund managers invest in Retail Food Group Ltd due to its turnaround potential and strong asset base. The company has successfully refined its offerings and exited underperforming locations, now operating 750 stores with well-known brands. The presence of significant shareholders, like United Petroleum, indicates confidence in future growth and potential synergies. Currently valued at an estimated 8.5x earnings, many believe the stock is undervalued compared to peers trading at higher multiples, enhancing its risk/reward profile for investors.
What happened to Retail Food Group Ltd (ASX:RFG)?
There have been no recent updates from fund managers regarding Retail Food Group Ltd although fund managers including Collins St Asset Management have previously commented.
What is the short interest in Retail Food Group Ltd (ASX:RFG)?
The short interest in Retail Food Group Ltd (ASX:RFG) is 0.49% which makes it the 278th most shorted stock on the ASX. Of the 63.1M shares that Retail Food Group Ltd has on issue, 311.1K have been sold short.
What does Retail Food Group Ltd (ASX:RFG) do?
Retail Food Group Ltd. operates as a food and beverage company, which engages in the franchise, investment, and management of food chains. It operates through the following segments: Bakery/Cafe, QSR, Coffee Retail, and Di Bella Coffee. The Bakery/Cafe incorporates its systems which is the Michel's Patisserie, Donut King, and Brumby's Bakery Brand. The QSR segment deals with the Crust Gourmet Pizza, Pizza Capers, and Rack 'em Bones Brand Systems. The Coffee Retail segment incorporates Gloria Jean's Coffees, Esquires, Café2U and The Coffee Guy Brand Systems. The Di Bell Coffee segment provides wholesale coffee operations. The company was founded by Murray Howard d'Almeida in 1989 and is headquartered in Robina, Australia.