Key RFG investor bails

ONE of Retail Food Group’s biggest shareholders has backed out of its short-lived investment in the flailing Gold Coast franchisor, losing up to $14.6 million in the process.

Florida-based fund manager Intrepid Capital Management paid between $1.78 and $2.49 per share for 9.3 million shares in the company from December 19 to February 16 in a spree that ended just before RFG was due to release its half-year report.

However the market slid within days of its last splurge after the half-year report for the company, which operates brands including Donut King, Brumbys, Gloria Jeans and Pizza Capers, was delayed.

RFG went on to report a net loss of $87.76 million for the six months to December 31 and announced its intention to close 200 Australian stores.

Investors responded by dumping shares, which scraped a 12-year low of 83c on April 5, and was at 92c on April 30 when Intrepid ceased being a substantial holder.

Intrepid Capital Management’s website says it takes “a contrarian approach to investing”.

As Intrepid was scaling back its stake, Invesco Australia Ltd was increasing its share, spending $2.4 million on 2.017 milion shares on April 20.

The buys took Invesco’s stake to 10.065 per cent.

The value of Southportbased RFG has dropped by $849 million compared to this time last year, when shares were trading at $5.54, giving the company a market capitalisation of $1.012 billion.

Shares closed yesterday, down 2.2 per cent, at 87.5¢.