Real Good Food: Announces Half Year Report

Liverpool / UK. (rgf) British Real Good Food Company PLC announced in mid-December its interim results for the six months to 30 September 2014. The Group is a diversified food business, serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Group is a major distributor of sugar in the UK through its Napier Brown subsidiary, and manufactures a wide range of baking ingredients, jams and sweet bakery products. Its brands include Whitworths Sugar, Renshaw and R+W Scott.

Ebitda performance is dominated by the British Sugar dispute, but this masks the fact that, in the first six months of low «off-season» trading, the rest of the Group (includes Renshaw, R+W Scott, Haydens Bakery, RGFE and central costs) has increased Ebitda significantly to 0.9 million GBP (2013: 0.2 million GBP), a fourfold increase, driven by improvements in Renshaw and at Haydens Bakery.

Excluding Napier Brown and Garrett Ingredients, the rest of the Group´s revenue grew by approximately nine percent to 40.2 million GBP reflecting the growth and development plans in place.

The dispute with British Sugar adversely impacted the results of Napier Brown and Garrett Ingredients in second half of financial year to March 2014 and in the six month period under review. In each of these six month periods underlying Ebitda in sugar has been a loss of three million GBP. However since the start of the new sugar contract year in October, Napier Brown has returned to profitability.

Reduction in working capital at 47.2 million GBP (2013: 49.1 million GBP) reflects drive to reduce inventory levels and to achieve a better balance in sales and purchase terms in sugar.

Increase in net debt to 36.3 million GBP (2013: 31.8 million GBP) reflects the reduced profitability, offset by the reduction in working capital. Group has facilities in place to manage this level and has maintained cash levels in line with its requirements. The September level reflects the normal seasonal pattern and will reduce in the coming months due to normal seasonality and significantly reduced sugar prices.

Pieter Totté, Executive Chairman, comments: «After suffering the impact of our pricing dispute with British Sugar, we are pleased by the start we have made to the new sugar contract year in October, since when our Napier Brown business has returned to profitability. At the same time, Renshaw and Haydens Bakery have made excellent progress and are trading significantly ahead of the prior year».

«Elsewhere, our new management teams at Garrett Ingredients and R+W Scott are successfully driving these businesses and we expect to see improved trading during the course of 2015. Real Good Food Europe in Brussels has the infrastructure to build our international activities and is delivering strong sales growth».

«Trading across the whole Group has been ahead of last year during October and November, with Renshaw and Haydens Bakery continuing to lead the way, and we look forward to a strong performance during the key Christmas period. We remain confident about the prospects for the Group and are working on a number of new corporate initiatives, with a focus on delivering value to shareholders».