Liverpool / UK. (rgf) British Real Good Food Company PLC (RGF), the diversified food business, announces that it has completed the sale of Haydens Bakery Limited to Bakkavor Group PLC, for a consideration of 12 million GBP, payable by means of a cash payment of 9.6 million GBP and the assumption by the buyer of 2.4 million GBP of third-party debt.
The cash funds received will be used to reduce the Group’s indebtedness, first settling the lending secured against Haydens’ assets (2.3 million GBP), then repaying in full the outstanding term loan with the Group’s bankers (1.3 million GBP). The balance of 6.0 million GBP will be split between funding the Group’s working capital requirements and the potential repayment of external shareholder debt.
Haydens bakes premium tarts, pies and crumbles, Danish pastries, sweet buns, yum yums and doughnuts and sells principally to major retail customers, and operates a same day consolidation service for one of its major customers. Haydens has been part of Real Good Food PLC since the Group’s inception in 2003. Given the complementary nature of Haydens’ to Bakkavor’s core business, the Board believes that, in line with its turnaround plan and focus on its core assets, there is greater value for the Group’s shareholders through this disposal to Bakkavor than through continued ownership.
In the Group’s financial year ended 31 March 2017, Haydens (excluding the Chantilly Patisserie business which is not a part of this transaction) contributed 31.3 million GBP of revenue, and broke even at profit before tax, closing that year with net liabilities of 0.8 million GBP. In the past 18 months, there has been significant investment in Haydens and the Group therefore expects to incur an accounting loss for the Group on disposal in the region of 0.5 million GBP, and a resulting write down of parent company reserves at 31 March 2018 in the region of 10.2 million GBP. The significant investment made in plant and equipment was, however, one of the clear attractions to Bakkavor in its acquisition of Haydens. This disposal of a non-core asset allows management and the Board to focus on the profitable assets elsewhere in the Group.
Publication of final results: The Group expects to issue its final results for the year ended 31 March 2018 before the end of September 2018.
Hugh Cawley, Chief Executive, said: «This disposal marks an important next step in the restructuring and performance improvement of Real Good Food and is line with our turnaround plan for the Group. Given the sizeable areas of common interest, we believe that Haydens and its staff will prosper better in partnership with Bakkavor».