Real Good Food: slips to Loss in 2008

London / UK. (rgf) Real Good Food Company PLC, the British sugars, ingredients and bakery company, announces Preliminary Results for the year ended 31 December 2008. Highlights:

• Competitive market conditions continued to affect core Sugar Division.
• Improved sales in Bakery Ingredients and Bakery Divisions.
• Total Group sales from continuing operations down 5.4 percent to 218,7 million GBP (2007: 231,1 million GBP).
• Profit before taxation and significant items of 0,89 million GBP (2007: 3,97 million GBP).
• Significant exceptional costs of 1,96 million GBP relating to re-financing and business reorganisation.
• Continuing operations loss before taxation of 421’000 GBP (2007: profit of 3,45 million GBP).
• Loss per share (basic and diluted) of 0,017 GBP (2007: earnings per share of 0,089 GBP).

Chairman Pieter Totte: «During the course of 2008, we continued to experience very difficult trading conditions, which deteriorated more significantly in the final quarter. Margins were continually under pressure from raw materials, fuel inflation and a very competitive market place. The Board looks forward to the rest of the year, and anticipates the benefits of its restructuring programme and low interest rate charges to deliver a result, which we anticipate will be reflected in an improved financial performance over the prior year».

Sales in Bakery Ingredients Division rose by 9,2 percent

During the course of 2008, the company continued to experience very difficult trading conditions, which deteriorated more significantly in the final quarter. Margins were continually under pressure from raw materials, fuel inflation and a very competitive market place.

Total Group sales for the period fell by 5,4 percent to 219 million GBP, principally due to a seven percent fall in revenues in our Sugar Division. By contrast, sales in the Bakery Ingredients Division rose by 9,2 percent to 35,0 million GBP, while the company also achieved a marginal increase in revenue at its Bakery Division.

The Sugar Division has continued to operate in a very competitive market, which is mostly due to the uncertainty created as the EU sugar regime undergoes reform. The commission has now confirmed that a total 5,65 million tonnes of sugar has been renounced out of the 6,0 million tonne target.

It is anticipated that there will be a small surplus in 2009 leading into the second reference price change in October 2009. The company does, however, expect the market to be in equilibrium in fourth quarter of 2009 and possibly in deficit until the new importing regions are able to meet the demand. In theory, this should lead to an improvement in operating margins going forward.