Half Yearly Report

RNS Number : 9286Q
Real Good Food Company Plc (The)
13 November 2012
 



The Real Good Food Company plc (AIM: RGD)

 

Interim Results for the six months to 30 September 2012

 

The Real Good Food Company plc ("the group" or "RGFC") is a diversified food group, which owns Napier Brown (Europe's biggest non-refining sugar distributor) as well as Renshaw and R&W Scott (bakery ingredients), Garrett Ingredients (dairy ingredients) and Haydens Bakery (patisserie and desserts).

 

HIGHLIGHTS



Six months to 30 September 2012

Six months to 30 September 2011


£'000s

£'000s




Revenue

                137,806

          128,215




EBITDA

3,023

3,092

 

Continuing profit before taxation

and significant items

 

1,173

 

1,373




Earnings per share



Basic: adjusted

1.5p

1.9p

Diluted: adjusted

1.4p

1.7p




Working capital

(Fixed Assets/Stock/Trade Debtors

 Trade Creditors and Tax)

 

45,479

 

41,687




Net borrowings

(Including Cash)

32,075

33,741







NB: These are the first interim results produced after the change in year end and as such the period to September 2011 has never been publicly reported.

 

·      Group continues to focus on brand development and driving sales growth

 

·      Divisional Highlights

o Key trading divisions of Napier Brown, Garrett and Renshaw all in line with this year's EBITDA expectations

o Significantly improved performance at R&W Scott - EBITDA up £0.8m over last year

o Improved performance at Haydens expected to accelerate in the second half

 

·      EBITDA little changed at £3.0m (2011: £3.1m) after increased investment in new branding initiatives  of £0.5m  at Napier Brown and Renshaw to support growth plans

 

·      Working Capital at £45.5m up 9.4% on last year, but well within planned levels and the normal seasonal pattern. Increase year-on-year primarily driven by higher stocks in Renshaw and Napier Brown, which will be worked off over the remainder of the year

 

·      Net debt reduced by £1.7m to £32.1m, despite increase in working capital



 

Pieter Totté, Executive Chairman, comments:

 

"We enter the critical Christmas trading period with all businesses in a strong position to maximise commercial opportunities. At the same time we continue to develop our medium term growth plans, and I am confident the group will deliver results for the year as a whole in line with market expectations."

 

13 November 2012

 

  

 

ENQUIRIES:

 

Real Good Food                              


Pieter Totté, Chairman

Tel: 020 3056 1516

Andrew Brown, Marketing Director

Mike McDonough, Finance Director

Tel: 020 3056 1516

Tel: 0151 706 8200



Shore Capital & Corporate

Tel: 020 7408 4090

Stephane Auton

Patrick Castle




Cubitt Consulting

Tel: 020 7367 5100

Gareth David

Cebuan Bliss


 


Business Review

 

I am pleased to report that our trading performance has been in line with expectations across our three key trading divisions, Napier Brown, Garrett Ingredients and Renshaw, with our diversified sales channels limiting our exposure to specific market challenges. Significant improvements have been achieved at R&W Scott, following its separation from Renshaw, while trading performance at Haydens Bakery continues to improve.

 

Further increases in the cost of commodities, in particular sugar, have impacted our levels of working capital, but these levels will reduce significantly by the end of the financial year. Meanwhile, by better matching customer and supplier terms, our net debt levels are well under control and remain within our facility limits.

 

We were delighted to announce in June a partnership agreement with Omnicane, the biggest sugar company in Mauritius, whereby it has taken a 20% stake in The Real Good Food Company. Discussions on how we can co-operate continue and I am delighted that Omnicane's Chief Executive Officer, Jacques d'Unienville, has agreed to join our Board as a non-executive Director. The opportunities for joint ventures on sugar sourcing and in opening up export markets, particularly in Africa, are exciting.

 

Napier Brown (Sugar

 

From its facility at Normanton, near Leeds, Napier Brown  sources sugar from the UK, mainland Europe and worldwide supplying customers in the UK across all market sectors; manufacturing, retail, wholesale and foodservice

 

Sales revenue increased 11% year-on-year, a combination of higher volume and increased market prices. Most of the volume increases were in the industrial sector where customers are attracted by our long term multi-sourcing strategy.

 

In retail, the focus has been on developing a differentiated product range around our Whitworths brand. The launch of our innovative new Baking Sugars in re-sealable pouches has been well received by the trade and marketing campaigns are in place to build on this in the coming months.

 

The new contract season from October has resulted in further volume increases in both industrial and retail and we continue to work on our plans to secure new sources of sugar in line with the growth ambitions. We expect shortly to complete the acquisition of a site for a new sugar terminal in East Yorkshire with plans for it to be operational during 2013.

 

Garrett Ingredients (Sugar and Dairy 

 

Based at Thornbury, near Bristol, Garrett sources dairy and other specialist food ingredients from across the UK, Eire and continental Europe for supply (along with sugar sourced from Napier Brown) to large, medium and small food manufacturing businesses across the UK.

 

Garrett also grew both tonnage and sales revenues. Dairy volumes increased though prices of skimmed milk powders were below last year's levels throughout most of the period, while the poor summer weather also reduced sales of ice cream mix and dairy ingredients to this sector. Meanwhile progress was made in broadening the product range to include the likes of dextrose, sweetened condensed milk and other complementary ingredients.


Renshaw (Bakery Ingredients)

 

Operating out of its Liverpool facility Renshaw is a leading manufacturer of high quality food ingredients, primarily to the baking sector both in the UK and for export with a strong reputation for quality, consistency and innovation.

 

Renshaw volumes and sales remained strong, although EBITDA was down as fixed costs increased, with investment in research, development and human resources to manage growth plans in particular in export and the setting up of a new online sales channel.

 

A major evaluation has been undertaken of the Renshaw brand. As a consequence we have redefined our vision for the brand, with a new emphasis on exploiting its distinctive credentials within the expert sugar-craft market. Plans are in place to expand the brand globally, with an online sales channel live in the New Year.

 

Research in a number of countries has confirmed the potential for the brand and its product range, while the online route to market will give the brand the ability to engage directly with many of its customers.

 

R&W Scott (Bakery Ingredients and Jam)

 

R&W Scott at its Carluke facility south-east of Glasgow produces chocolate coatings and sauces, jams and dry powder blends for the industrial, retail, wholesale and foodservice markets.

 

The new standalone R&W Scott business returned to profitability during the first half of the year and is on track to deliver a positive EBITDA performance for the full year. The greater focus delivered by the new management team is producing the desired results, with new ranges planned in retail jams and new opportunities being pursued for coatings in wholesale and foodservice channels. Plans are also in place to supply jam and sauce ingredients to Haydens, which will realise significant benefits for both businesses.

 

Haydens Bakery (Patisserie and Desserts) 

 

From its site in Devizes, Wiltshire, Haydens Bakery produces an extensive range of high added value, hand finished, ambient, chilled and frozen patisserie and dessert products to retail and foodservice customers. Through its Hopton Distribution facility, it also consolidates distribution of bakery products from other manufacturers to Waitrose.

 

EBITDA performance improved year-on-year though, as previously reported, the recovery plan is taking longer than anticipated. We are taking action across the business and remain confident that the second half of the year will see a significant improvement in performance, with the business moving into profitability. New sales opportunities are being realised in both retail and increasingly foodservice, where the frozen supply chain is commercially attractive.

 

 

Cash flow and Debt

 

Working capital levels at September 2012 at £45.5m are £3.8m higher than September 2011 (£41.7m) primarily driven by higher stock levels. Debtor and creditor levels were both up but by similar amounts reflecting an improvement in the balance of respective trading terms. Capital expenditure at £1.3m is marginally below last year's level of £1.5m.

 

Despite the increase in working capital levels net debt (including cash) at September 2012 was £32.1m, down from the September 2011 level of £33.7m. The group retains significant headroom within both its banking covenant and its facilities. 


The group is proactive in extending its banking arrangements beyond the July 2013 renewal date. The completion timetable has been agreed and it is planned to announce the new arrangements by the end of the calendar year. In the meantime we have moved £4.96m of term loans to current as they fall due within the next 12 months, borrowings due over one year are now £2.77m as compared to £6.79m at September 2011    

 

Outlook

 

We enter the critical Christmas trading period with all businesses in a strong position to maximise commercial opportunities. At the same time we continue to develop our medium term growth plans, and I am confident the group will deliver results for the year as a whole in line with market expectations.

 

Pieter Totté

Executive Chairman

 

13 November 2012



THE REAL GOOD FOOD COMPANY PLC

INDEPENDENT REVIEW REPORT TO THE REAL GOOD FOOD COMPANY PLC FOR THE SIX MONTHS TO 30 SEPTEMBER 2012

Introduction

We have been engaged by the company to review the condensed set of financial statements in the six monthly interim financial report for the six months ended 30 September 2012, which comprises the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated statement of cashflows and the related notes. We have read the other information contained in the six monthly interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company, as a body, in accordance with our instructions.  Our review has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The six monthly interim financial report is the responsibility of, and has been approved by, the directors.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this six monthly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the six monthly interim financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the six monthly interim financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union.

Crowe Clark Whitehill LLP

Chartered Accountants

10 Palace Avenue

Maidstone

Kent ME15 6NF


THE REAL GOOD FOOD COMPANY PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2012 (UNAUDITED)

 


Notes

Six Months Ended 30 September 2012

 

Six Months Ended 30 September 2011

 



Before Significant Items

Significant Items

Total

Before Significant Items

Significant Items

Total



£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

CONTINUING OPERATIONS
















Revenue


137,806

-

137,806

128,215

-

128,215

   Cost of sales


(122,048)

-

(122,048)

(112,615)

-

(112,615)









Gross profit


15,758

-

15,758

15,600

-

15,600

   Distribution costs


(5,246)

-

(5,246)

(5,530)

-

(5,530)

   Administration expenses


(8,556)

-

(8,556)

(8,016)

-

(8,016)



 

 

 

 

 

 

Operating profit


1,956

-

1,956

2,054

-

2,054









Finance costs


(824)

-

(824)

(788)

-

(788)

Net pension finance income


41

-

41

107

-

107









Profit  before taxation


1,173

-

1,173

1,373

-

1,373









Taxation


(153)

-

(153)

(160)

-

(160)









Profit  from continuing operations


 

1,020

 

-

 

1,020

 

1,213

 

-

 

1,213

















Profit  for the period attributable to the equity holders of the parent


1,020

-

1,020

1,213

-

1,213









Other comprehensive income








Actuarial losses on defined benefit plans


 

(329)

 

-

 

(329)

 

(548)

 

-

 

(548)

Income tax relating to components of other comprehensive income


 

79

 

-

 

79

 

137

 

-

 

137



 

 

 

 

 

 

Total comprehensive income for the period


 

770

 

-

 

770

 

802

 

-

 

802

   Basic profit  per share

5

1.5p


1.5p

1.9p


1.9p

   Diluted profit per share

5

1.4p


1.4p

1.7p


1.7p










 

THE REAL GOOD FOOD COMPANY PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 SEPTEMBER 2012 (UNAUDITED)

 

 








30 Sept 2012

31 Mar 2012

30 Sept 2011



£'000s

£'000s

£'000s

ASSETS

NON CURRENT ASSETS





Goodwill


75,796

75,796

75,796

Intangibles


467

521

570

Property, plant and equipment


17,371

17,057

16,367

Deferred tax asset


874

912

488



94,508

94,286

93,221






CURRENT ASSETS





Inventory


22,661

17.380

19,449

Trade and other receivables


30,386

24,444

27,799

Cash and cash equivalents


3,892

2,506

1,390



56,939

44,330

48,638

Total Assets


151,447

138,616

141,859






LIABILITIES

CURRENT LIABILITIES





Borrowings


33,193

24,366

27,865

Trade and other payables


25,015

20,082

21,960

Current tax liabilities


391

570

538

Derived financial instruments


-

-

30



58,599

45,018

50,393






NON CURRENT LIABILITIES





Borrowings


2,774

6,796

7,266

Deferred tax


2,745

2,886

3,070

Retirement benefit obligations


1,290

1,080

376



6,809

10,762

10,712

 

Net Assets


86,039

82,836

80,754






SHAREHOLDERS' EQUITY





Called up share capital


1,389

1,300

1,300

Share premium account


71,244

68,874

68,874

Other reserves


500

526

171

Profit and loss account


12,906

12,136

10,409






Total Equity


86,039

82,836

80,754


THE REAL GOOD FOOD COMPANY PLC

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2012 (UNAUDITED)

 

 


Issued

Share

Capital

Share Premium Account

IFRS 2

Share Option reserve

Retained Earnings

Total


£'000s

£'000s

£'000s

£'000s

£'000s







Balance at 1 April 2011

1,300

68,870

119

9,607

79,896







Shares to be issued - Options

-

-

52

-

52

Shares issued in period

-

4

-

-

4

Total comprehensive income for the period

-

-

-

802

802













Balances as at 30 September 2011

1,300

68,874

171

10,409

80,754



















Balance at 1 April 2012

1,300

68,874

526

12,136

82,836







Shares to be issued - Options

-

-

(26)

-

(26)

Shares issued in period

89

2,370

-

-

2,459

Total comprehensive income for the period

-

-

-

770

770













Balances as at 30 September 2012

1,389

71,244

500

12,906

86,039


 

THE REAL GOOD FOOD COMPANY PLC 

STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDING 30 SEPTEMBER 2012 (UNAUDITIED)

 

 



6 months to

 30 Sept 2012


6 months to

30 Sept 2011



£'000s


£'000s

CASH FLOW FROM OPERATING ACTIVITIES




Profit  for the period before taxation


1,173


1,373

Adjusted for:





Finance costs


824


788

IAS 19 income


(41)


(106)

Depreciation of property, plant & equipment


1,004


959

Amortisation of intangibles


56


68






Operating Cash Flow


3,016


3,082






(Increase) in inventories


(5,281)


(7,227)

(Increase) in receivables


(5,943)


(1,254)

Pension contributions


(76)


(65)

Increase in payables


4,959


3,657

Cash outflow from operations


(3,325)


(1,807)

Income taxes paid


(411)


(299)

Interest paid


(824)


(788)

Net cash outflow from operating activities


(4,560)


(2,894)






CASH FLOW FROM INVESTING ACTIVITIES





Purchase of intangible assets


(5)


(13)

Purchase of property, plant & equipment


(1,313)


(1,465)

Net cash used in investing activities


(1,318)


(1,478)






CASH FLOW FROM FINANCING ACTIVITIES





Shares issued


2,459


4

Additional borrowings


5,006


5,178

Repayment of obligations under finance leases


(201)


(110)

Net cash used in financing activities


7,264


5,072

 

NET INCREASE IN CASH AND CASH  EQUIVALENTS


1,386


700






CASH AND CASH EQUIVALENTS





Cash and cash equivalents at beginning of period


2,506


690

Net movement in cash and cash equivalents


1,386


700



 

Cash and cash equivalents at balance sheet date


3,892


1,390






 

Cash and cash equivalents comprise:





Cash


3,892


1,390



3,892


1,390

 


THE REAL GOOD FOOD COMPANY PLC 

NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2012

 

 

1.    General Information

 

The Real Good Food Company Plc is a public limited company ("company") incorporated in the United Kingdom under the Companies Act (registration number 4666282). The company is domiciled in the United Kingdom and its registered address is 229 Crown Street Liverpool Merseyside L8 7RF. The company's shares are traded on the Alternative Investment Market ("AIM").

 

The principal activities of the group are the sourcing, manufacture, marketing and distribution of food and industrial ingredients.

 

Copies of the interim report are being sent to shareholders. Further copies of the interim report and Annual Report and Accounts may be obtained from the address above.

 

 

2.    Basis of preparation

 

These condensed consolidated financial statements are presented on the basis of International Financial Reporting Standards (IFRS) as adopted by the European Union and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and have been prepared in accordance with AIM rules and the Companies Act 2006, as applicable to companies reporting under IFRS.

 

The same accounting policies and methods of computation are followed within these interim financial statements as adopted in the most recent annual financial statements.  IFRS 7 Amendments to Financial Instruments Disclosures has been adopted from 1 April 2012.  The adoption of this standard has not had a material impact on these interim financial statements.

New IFRS standards and interpretations not adopted

·      IAS 1 Amendment - Presentation of items of other comprehensive income

·      IAS 12 Amendments -  Deferred tax: Recovery of Underlying Assets

·      IFRS 7 and IAS 32 Offsetting financial assets and financial liabilities

·      IAS 27 Separate Financial Statements

·      IFRS 9 Financial Instruments

·      IFRS 10 Consolidated Financial Statements

·      IFRS 11 Joint Arrangements

·      IFRS 12 Disclosure of Interests in Other Entities

·      IFRS 13 Fair Value Measurement

·      IAS 19 Amendment - Employee Benefits

 

The adoption of these standards, amendments and interpretations is not expected to have a material impact on the group's profit for the period or equity.  Application of these standards will result in some changes in presentation of information within the condensed interim financial statements.

 

 

 

3.    Significant items

 

It is the group's policy to show items that it considers to be of a significant nature separately on the face of the Consolidated Statement of Comprehensive Income in order to assist the reader to understand the accounts. The company defines the term 'significant' as items that are material in respect of their size and nature; for example, a major restructuring of the activities of the group. No significant items are reported in the six months to September 2012 and 2011

 

4.    Segment analysis

 

Business segments

The group's operating segments are Napier, Garrett, Renshaw, R&W Scott and Haydens reflecting the group's management and reporting structure.

The following table shows the group's revenue and results for the period under review analysed by operating segment. Segment profit represents the trading profit after depreciation but before significant items.

 


Six months to 30 September 2012


Napier

Garrett

 

 

 

 

Renshaw

R&W Scott

Haydens

Total Before Significant Items

Significant Items

Total After Significant Items


£'000s

£'000s

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s










Total revenue

89,806

17,440

18,820

5,879

11,764

143,709

-

143,709

Revenue - internal

(5,597)

(306)

-

-

(5,903)

-

(5,903)


 

 

 

 

 

 

 

 

External revenue

84,209

17,134

18,820

5,879

11,764

137,806

-

137,806


 

 

 

1,574

 

 

 

 

 

Operating profit/(loss)

1,109

1,143

(3)

(572)

3,251

-

3,251










Finance costs (net of interest received)                          

(504)

(102)

(113)

(70)

(824)

-

(824)

Pension finance costs

-

-

-

-

41

-

41

Head office and unallocated

-

-

-

-

-

(1,295)

-

(1,295)

Profit before tax

605

1,041

1,461

(38)

(642)

1,173

-

1,173










Tax

(132)

(227)

(319)

8

139

(531)

-

(531)

Tax unallocated

-

-

-

-

-

378

-

378










Profit after tax as per income statement

473

814

1,142

(30)

(503)

1,020

-

1,020

 

 

 

Inter-segment sales are charged at prevailing market rates.

THE REAL GOOD FOOD COMPANY PLC 

NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2012                        

 

4.    Segment reporting (continued)

 

 

As at

30 SEPTEMBER 2012

Napier

Garrett

Renshaw

R&W Scott

Haydens

Unallocated

Total Group


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s









Segment assets

32,184

6,577

19,587

7,078

8,442


73,868

Unallocated assets








  Goodwill







75,796

  Property, plant and  equipment







24

  Deferred tax assets







874

  Trade and other receivables







885









Total assets







151,447









Segment liabilities

(32,084)

(6,234)

(11,942)

(2,432)

(3,181)


(55,873)

Unallocated liabilities








  Trade and other payables







(200)

  Borrowings







(6,326)

  Current tax liabilities







273

  Deferred tax liabilities







(1,992)

  Retirement benefits obligation







(1,290)









  Total liabilities







(65,408)

Net operating assets

 

100

 

343

 

7,645

 

4,646

 

5,261


 

86,039









Non current asset additions

147

-

356

90

720

-

1,313

Depreciation

178

-

368

138

316

4

         1,004

Amortisation

26

-

24

-

6

-

56









Geographical segments

 

The group earns revenue from countries outside the United Kingdom, but as this only represents 6.5% of the total revenue of the group, segmental reporting of a geographical nature is not considered necessary in accordance with the provisions of IFRS 8.

 

 

 

THE REAL GOOD FOOD COMPANY PLC 

NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2012

 

5.    Earnings per ordinary share

 

Earnings per share is calculated on the basis of the profit for the period after tax, divided by the weighted average number of shares in issue for the six month period of 67,363,509 (2011 65,016,930).

 

Diluted profit per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares. Potential dilutive ordinary shares arise from share options and warrants. For these, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the exercise price attached to outstanding share options. Thus the dilutive weighted average number of shares considers the number of shares that would have been issued assuming the exercise of the share options.

 

An adjusted profit per share and a diluted adjusted profit per share, which exclude significant items, has also been calculated as in the opinion of the board this will allow shareholders to gain a clearer understanding of the trading performance of the group.

 




Six months to 30 September 2012


Six months to 30 September 2011




Earnings

£'000s

Weighted Average No.

of shares

Per share amount pence


Earnings   £'000s

Weighted Average No. of shares

Per share amount pence










Profit attributable to ordinary shareholders


         1,020

  67,363,509

1.5


    1,213

65,016,930

1.9













Significant items


-

               -

-


         -

-

-










Adjusted profit per share


         1,020

  67,363,509

1.5


    1,213

65,016,930

1.9











Dilutive effect of options


              -

   6,145,866

-


          -

6,961,981

-

Dilutive effect of warrants


              -

               -

-


          -

-

-











Diluted profit per share


        1,020

  73,509,375

1.4


    1,213

71,978,911

1.7

















Diluted adjusted profit per share

        1,020

  73,509,375

1.4


    1,213

71,978,911

1.7









 

6.    Dividends

No dividend is proposed for the six months ended 30 September 2012 (2011 Nil).

 

7.    Taxation

 

The charge for taxation is based on the results for the period and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

 

Provision is made in full for taxation deferred in respect of timing differences that have originated but not reversed by the balance sheet date, except for gains on disposal of fixed assets which will be rolled over into replacement assets.  No provision is made for taxation on permanent differences.  Deferred tax is not discounted.

 

Deferred tax assets are recognised to the extent that it is more likely than not that they will be recovered.



THE REAL GOOD FOOD COMPANY PLC 

NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2012

 

8.    Pension arrangements

 

A subsidiary of the Group, RenshawNapier Limited, operates a defined benefit pension scheme, the Napier Brown Retirement Benefits Scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The contributions made by the employer over the six-month period have been £76,000

 

Assumptions

 

The assets of the scheme have been included at market value and the liabilities have been calculated using the following principal actuarial assumptions:

 


30 September 2012

% per annum

31 March

2012

% per annum

30 September 2011

% per annum

Rate of increase in pensions in payment

2.10

2.80

2.50

Discount rate

4.75

5.00

5.30

Inflation assumption

2.20

2.90

2.60

Revaluation rate for deferred pensions

1.20

1.90

1.60

 

The fair value of the assets in the scheme, the present value of the liabilities in the scheme and the expected rate of return at each balance sheet date were:

 


30 September 2012

%

31 March

2012

%

30 September 2011

%

Equities

7.55

7.55

7.50

Bonds

4.60

4.60

5.50

Property

7.55

7.55

7.50

Cash

0.50

0.50

0.50

Overall for scheme

5.87

5.87

5.25

 

 


30 September 2012

£'000s

31 March

2012

£'000s

30 September 2011

£'000's

Total fair value of assets

15,902

16,005

15,860

Present value of scheme liabilities

(17,192)

(17,085)

(16,236)

(Deficit) in the scheme

(1,290)

(1,080)

(376)

 

The scheme is a closed scheme and therefore under the projected unit method the current service cost would be expected to increase as the members of the scheme approach retirement.

 

9.    Share Capital

 

During the period the company issued 4,065,652 ordinary shares for consideration of £2,439,391. In addition 380,952 of share options were exercised and total consideration received on exercise was £20,000.

 

10.    Seasonality

 

Most of the trading divisions of RGFC are seasonal, creating a large proportion of their EBITDA in the October to December period. This was the prime reason we changed our accounting reference date to the 31 March in order to improve both the quality and accuracy of our budget and investor reporting.   


This information is provided by RNS
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