RGF: announces Trading Update for FY 2023-2024

Liverpool / UK. (rgf) British Real Good Food Company PLC (RGF), the food manufacturing business specialising in cake decoration, announces a trading update for its current financial year (ending 31 March 2024) to date.

After a slow start to the year as we anticipated, the Group is trading well as it starts its busy seasonal third quarter in the lead up to Christmas. The benefit from the successful implementation of the Group’s radical programme of reform is tangible and is expected to boost profitability in the coming months.

For the first six months to 30 September 2023, revenues were 2 percent up overall to GBP 16.1m compared to the same period in the prior year (H1 23: GBP 15.9m), reflecting the benefits of our pricing actions, albeit volumes were down circa 10 percent due to weak market conditions and exiting low margin sales. Revenues in August and September were GBP 1.0m ahead of the same months last year at GBP 5.9m. Going into the second half, revenues in October are expected to be circa GBP 4.6m, 6 percent above October 2022.

More importantly, the unaudited Ebitda loss was much reduced at GBP 0.7m for the period (H1 23: GBP 2.3m loss). Gross margins, at 35.9 percent compared to 34.4 percent H1 last year, and 33.3 percent for FY23 full year, continue to improve due to price resets, more effective pass through of cost inflation (which continues) and self-help gains from improved cost efficiency. After distribution costs, margins were 26.6 percent for H1 compared to 22.3 percent H1 last year.

As previously stated, performance during H1 was constrained by supply issues and cash constraints, which the business is trying to resolve and we remain on track to deliver circa GBP 8.0m of price resets, efficiency gains and cost savings for FY24. The Board therefore anticipates reporting a significant turnround for the full year with Ebitda in the region of GBP 1.0m (FY 23: GBP 5.8m loss) with an exit run rate of GBP 3m to GBP 4m Ebitda.

The Group continues to finalise its agreement with Hilco Private Capital for a twelve-month extension to its loan agreement with them and a further announcement will be made once the documentation has been completed.

The Board expects to issue the Group’s half year results to 30 September 2023 and an update on current trading in December 2023.