Retail Food Group criticises UBS reports after share plunge

Posted by AFN Staff Writers on 7th June 2017

An Australian Donut King store

Owner of Crust Pizza, Donut King and Gloria Jean’s Coffee, Retail Food Group, has experienced a significant drop in its share price with the company attributing the fall to UBS reports.

RFG, which owns a number of food brands operating in Australia, saw its share price drop by 11 per cent on Monday 5 June 2017.

In an Australian Securities Exchange announcement, RFG attributed the trading change to two UBS reports issued 2 June 2017.

The UBS reports discuss an introduction of a new accounting standard (IFRS 16 Leases) and analyses it may negatively impact RFG’s balance sheet.

RFG has since however said “UBS would have no insight into the Company’s [RFG’s] position in respect of the impact (if any) of IFRS16 Leases”.

The company further stated that any assumptions on the potential impact of the accounting standards change was “premature, precipitous and with respect, an exercise in speculative guesswork.”

In response to RFG’s criticism, a UBS spokesperson said “UBS analysts provide insightful, relevant research on companies to help our clients with their investment analysis and this research is no exception.”

Volatility and volume in RFG shares “extraordinary”

Alex Moffatt, Director of financial consultancy firm, Joseph Palmer and Sons Victoria, told Australian Food News the volatility and volume in RFG’s shares over the past couple of days has been extraordinary and that he personally believed it was exacerbated by algorithmic trading.

“Once the dust settles it will be interesting to note any changes to major shareholders,” Moffatt said.

RFG brands include Donut King, Crust Pizza, Pizza Capers Gloria Jean’s, Di Bella Coffee, Brumby’s Bakery and Michel’s Patisserie.