Liverpool / UK. (rgf) British Real Good Food Company PLC (RGF), the food manufacturing business specialising in Cake Decoration, announces that it has sold the business and certain assets of Rainbow Dust Colours (RDC) to European Fermentation Products Limited for a total cash consideration of GBP 800,000.
The Disposal provides JF Renshaw cash to help fund its working capital during the busy period in the run up to Christmas and to leverage its recently completed, and successful, programme of radical reform. A condition of the sale is that GBP 220,000 of the proceeds from the Disposal will be used to pay down a proportion of the Hilco Private Capital secured loan facility.
The assets being sold include plant and machinery, inventory, domain names and trademarks. The sale is expected to make a profit of circa GBP 325,000 against book value for the Company. In the year to 31 March 2023, RDC reported a break-even result at Ebitda level.
In conjunction with the Disposal the Board has carefully reviewed its management accounts and working capital position as well as the expected sales in November and December. As noted in the trading update on 31 October 2023, performance has been constrained by supply issues and cash constraints. These are continuing and sales in November and December are now expected to be lower than previously forecast. This has led to the Board to conclude that it is in the best interests of all stakeholders to explore strategic options for its remaining business JF Renshaw.
The Board of JF Renshaw Limited has consequently resolved to appoint Interpath Advisory as its adviser to assist with the review of all strategic options, given a challenging environment for the Company and the cash flow constraints, which may include the sale of the shares or the business and assets of JF Renshaw as well as sourcing necessary external funding.
Further announcements will be made as and when appropriate.
Executive Chairman Mike Holt: «We have made substantial progress over the last year. The radical reform programme has delivered significant benefits and recent senior management changes have also made a real difference. The Group, however, is struggling to meet demand through supply issues and cash constraints. The Board together with JF Renshaw is exploring all possible options and is working closely with Interpath Advisory to determine the best way forward,» he said in the announcement.