Real Good Food: Final Results for FY 2020-2021

Liverpool / UK. (rgf) British Real Good Food Company PLC (RGF), the diversified food business, announced its final results for the year ended 31 March 2021. «Much has happened since 31 March 2020 in terms of making progress and restoring shareholder value. The Group has coped with the challenges of Covid and has continued to improve underlying profitability. In addition, the debt burden was halved following the successful sale of Brighter Foods. Renshaw and Rainbow Dust Colours, our two remaining businesses, continue to improve their performance, and after a good start to the year, prospects are encouraging,» said Executive Chairman Mike Holt in his statement. Summary:

Financial highlights

  • Revenue from continuing businesses decreased by 9.5 percent to GBP 37.3 million (2020: GBP 41.2 million), in a year affected by Covid-19.
  • The Group delivered an adjusted underlying Ebitda on continuing businesses of GBP 0.2 million (2020: loss of GBP 1.6 million), despite the impact of Covid-19 on the continuing business.
  • Cake Decoration, the Group’s continuing business, was profitable (before depreciation, amortisation and significant items) and generated an adjusted Ebitda of GBP 0.8 million (2020: GBP 1.8 million).
  • Central costs reduced significantly by GBP 2.9 million to GBP 0.6 million (2020: GBP 3.5 million).
  • Net debt significantly reduced post year end, following the sale of Brighter Foods in May 2021:
    • Year-end net debt of GBP 48.8 million (2020: GBP 45.4 million).
    • Following the sale of Brighter Foods, net debt was reduced by GBP 26.4 million.
  • The Board renegotiated interest rates on convertible loan notes to a simple 12 percent per annum with effect from 1 January 2021, and in September 2021 extended the redemption dates to 2023.
  • The shareholder loans were extended in September 2021 to be repayable in May 2023.

Operational highlights

  • Brighter Foods was sold to The Hut Group (THG) on 11 May 2021 for a cash consideration of GBP 43 million. The sale price broadly equated to 8.6 times FY20 Ebitda and 11.7 times (unaudited) Ebitda for the 12 months ended 31 March 2021.
  • Cake Decoration (trading under the brand names of Renshaw and Rainbow Dust Colours) demonstrated an ability to win new business from its streamlined cost base:
    • Launched 66 new products in the year with in-year revenues of approximately GBP 1.6 million and secured an important new blue-chip customer.
    • Improved year-on-year frosting revenues by 17 percent, following investment in its soft icing plant in this growing market.

Current trading

  • Group revenues and profit are in line with Board expectations, and ahead of pre-pandemic levels (FY20), for the first five months of the new financial year, with good retail and international sales.
  • Performance (underlying increased margins and increased revenues) achieved despite the recent logistics challenges seen across the UK economy.
  • Cake Decoration has a solid foundation to launch more innovative products whilst working with customers to maximise its sales opportunities.
  • Renshaw continues to win industry recognition, having been shortlisted in The Grocer, New Product Awards 2021, for its Luxury Bakers Caramel and Silver Shimmer Icing Kit.
  • The Board remains focussed on reviewing all initiatives to continue to improve the capital structure of the Group; including the intention to de-list the Group from AIM to save costs and provide greater agility and flexibility to maximise shareholder value.
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