ABQ SHARES CONTINUE FALL ON EMPLOYEE "BONUS" ANNOUNCEMENTS

Allied Brands Ltd. (ABQ) shares continue to plummet all while competitors, and the balance of the market, soar.

So what do the directors at Allied Brands do? THEY ISSUE ANOTHER LARGE TRANCHE OF STOCK TO THESE NON-PERFORMING EXECUTIVES!

Since there is widespread speculation that Allied Brands is up "for sale", and likely to be sold piecemeal, it seems as if some executives are getting their "golden parachutes" in order.

This can be the only excuse for this corporate largess. After all, what company rewards failing executives?

Oh, that's right - AIG, Telstra, Macquarie Bank. . . . the list goes on.

TYPICAL HYPE FROM ALLIED BRANDS (ABQ) THAT NEVER COMES TRUE

Here's a typical announcement from Allied Brands Ltd. (ABQ) that was made during a downturn in their stock. Hype from the management.

Here we are, a year later - did any of this come true? Apparently not, there are no Cookie Man shops shown in the so-called expansion countries (Malaysia, Cyprus, Canada, England, Dubai, UAE, Japan, Spain, Thailand, or Russia) and no further hype about the brand.

You've got to wonder about the sanity of a management group that continually spews stories about "what we're going to do", instead of actually expanding the brands and then publishing stories to the market "about what we've accomplished".

Even more interesting however is the rapid decline in Indian store numbers, shown in the above story as 28 with five new stores to open by March of 2008.

Actual current store numbers in India look to have crashed to 19 currently:

http://www.cookiemanindia.com/quickbiteindia.asp

RETAIL FOOD GROUP TO BUY ALLIED BRANDS???

Persistent rumours in the share market report that Retail Food Group Australia (ASX: RFG) are undertaking a hostile takeover of Allied Brands Ltd. (ASX: ABQ). What does this mean to current and former Baskin Robins franchisees?

RFG looks to be a well-managed company, unlike the current mob at ABQ.

Franchisees with Donut King and BBcafe seem to be fairly satisfied with the performance of their management, unlike the current mob at ABQ.

It would seem however that while some parts of Allied Brands would be a good "fit" for Retail Food Group, serious conflicts of interest exist between Baskin Robbins (and parent company Dunkin Brands) and RFG's operations.

Among other things, the Donut King operations in China would be a direct attack on Dunkin Brands expansion of Dunkin Donuts in China.

And you have to wonder if Retail Food Group managment Tony Alford is aware of the shaky viability of 1/3 or more of the Baskin 31 shops in Australia. Their due diligence has yet to examine any of the Baskin shop franchisees, and the as yet unpublicised litigation on foot.

MARKET CONFIRMS, ABQ PRICE SLIDE CONTINUES

After a week of market action which has seen many of the Australian consumer shares go UP, Allied Brands (ABQ) half yearly report has been received with disdain by the market.

Shares have now gone to .14, with continued pressure on the downside as punters look to clear out their non-performing shares.

And while a large number of shares in ABQ are held by insiders, the sales book looks to be increasing as mom & pop finally begin to realise what suckers they've been.

Market cap is now $14 million, fully 20% BELOW the amounts paid for Cookie Man, Awesome Water, and Kenny's Cardiology. With the biggest potential cash spinner, Baskin 31 Robbins, worth nothing?

And with ABQ showing a huge number of unsold franchises on their books (and the market for new franchisees something approaching ZERO at the moment), someone's got to ask - where's the cash going to come from to keep this chain operating?

ALLIED BRANDS BLEEDING CASH, AGAIN ON DOWNWARD SPIRAL

Allied Brands Ltd (ABQ) has posted their crashing results with the market yesterday, and company MD Peter Graham is spinning wildly the failure with misplaced blame on the "low Australian dollar".

http://www.goldcoast.com.au/article/2009/03/03/55015_gold-coast-business.html

In the company's prospectus, they claim to be "currency hedging" against just this occurrence. And in their half-yearly financials, they show a $247K currency PROFIT on hedging. So what's the real story?

In their half-yearly report, they show again their propensity for "bleeding" cash, with cash on hand over halving from $4.8M to $1.9M. This is bad as much of the summer played out in this last quarter.

Liabilities DOUBLE the market cap of the company, with a huge number of unsold franchises showing how little trust this company has with the market.

Operationally, the company shows same store sales growth at 5% - negative actual growth considering the huge pricing increases implemented at Cookie Man and Baskin Robbins during this period. Customer numbers have crashed!

Note also "trade prepayments" have increased substantially - vendors already know that this company is in trouble, and are apparently demanding Cash In Advance for their services.

This is exactly the pattern shown during the 2004-2005 periods, when new investors needed to inject a massive new amount of cash to save the company. And this was in a strong and growing economy, not a weak and declining one as we have now.

COMPARE THIS DECLINING PERFORMANCE with that of the Retail Food Group (RFG), a company that is almost identical in franchise makeup to Allied Brands:

http://news.smh.com.au/breaking-news-business/retail-food-group-flags-20-profit-jump-20090303-8na4.html

Compare also ABQ's "announcements" to the market in the last couple years with their performance.

How about the "big announcement" in April 08 of Cookie Man expanding into international areas including the Middle East, UK, and India. NADA.

Or the "big new expansion" of Baskin Robins shops into Western Australia. Instead, we have only shops closing!

Questions continue to be raised about the competency of management at ABQ.

ABQ Still Overvalued as Brands Collapse

Allied Brands Ltd. (ABQ) shareholders should take note at the continued dilution in their shareholdings.  In the next few weeks, another almost 5.5 MILLION shares will be unfrozen from trading. 

With another million more coming out of escrow shortly.

With retail trading down massively across the board, these brands (Baskin Robbins, Cookieman, Kenny's Cardiology gift shops) it is clear that this company looks to be in more trouble than most.

Allied paid:

$7.1 MM           Awesome Water

$5.8 MM           Kenny's Cardiology

$5.83 MM         Cookieman

$18.73 MM       TOTAL PURCHASE PRICE

Current Market Valuation   $18.0MM

Curiously this doesn't include the largest and most reputable international brands, Baskin Robbins Ice Creamery.  Clearly the market understands that these brands are slowing deteriorating under the failed management at Allied Brands, just as the Baskin Robbins shops continue to fail.

With another 5% of shares now being released for trading (and let's face it, the people paid with these shares wouldn't seem to be likely to sit on them in the face of the facts that they are aware), Allied Brands (ABQ) looks to be headed to single-digits before too long.

Baskin Robbins Franchises Lodge ACCC Complaint for Unconscionable Conduct

We've received several reports from Baskin Robbins franchisees that their wholesale ice cream price paid to Allied Brands Ltd. is now "floating" with changes in the US$-AU$ exchange rate.

A prominent franchisee solicitor firm at Surfers has been hired to fight on behalf of a large (majority) group of franchisees.  

It is alleged in the complaint filed with ACCC that Allied Brands Ltd. has engaged in unconscionable conduct in this action, violation of ACCC laws on trade line forcing, and false disclosure to the franchisees.

Who in their right mind would sign an agreement for a franchise if the franchisor told them their price for their ice cream can change WEEKLY???

Have you ever seen McDonalds, Wendy's, or any other QSR franchise adjusting their pricing WEEKLY?  It's crazy!

And as one franchisee has pointed out, Allied Brands Ltd. (ABQ) made a promise to their shareholders in the original prospectus that the pricing on ice cream and other imported goods would be "currency hedged" - this means that the pricing stays the same no matter the rise and fall in the currency exchange.  Kinda like buying insurance.

Seems like ABQ hasn't done this, not just screwing their franchisees but also screwing their shareholders.  Shareholders obviously lose big when their businesses are forced to RAISE retail pricing in a deflationary environment - brands like Wendy's are lowering prices to expand market share.  Baskin Robbins Australia shops, forced to RAISE pricing because of Allied Brands incompetence, are LOSING market share.

Could be why Allied Brands Ltd. (ABQ) stock is now sitting at .18 a share, a massive collapse and far greater than other companies in this same business in Australia.  It isn't the sharemarket, it's Allied Brands!