Issue of Equity

Real Good Food Company Plc (The) 22 December 2003 For Immediate Release 22nd December, 2003 The Real Good Food Company Plc ('Real Good Food' or 'the Company') Proposed Placing of up to 7,407,407 new Ordinary Shares at 135p per share Introduction The Company announces that it proposes to raise up to £10,000,000 (before expenses) by way of a Placing of up to 7,407,407 new Ordinary Shares. Details of the Placing Pursuant to the terms of the Placing the Company is proposing to issue to institutional investors and clients of J M Finn & Co., up to 7,407,407 new Ordinary Shares at 135 pence per share, to raise up to £10,000,000 before expenses. The net proceeds of the Placing, which will amount to approximately £9,470,000 (assuming full subscription under the Placing) are intended to provide the cash element for any acquisitions which the Company makes in the next 12 to 24 months. The Placing is conditional, inter alia, on the approval of all of the resolutions to be proposed at an Extraordinary General Meeting and Admission of the new Ordinary Shares to trading on AIM. The Placing is not being underwritten. A circular with details of the Placing and a notice of EGM will be posted to shareholders later today. It is the Directors' view that the Placing is the most appropriate way of raising capital for the Company as it avoids the costs of a prospectus issue and enables placees to take advantage of certain tax reliefs. Whilst the Directors are aware of a number of companies, which may represent potential acquisitions opportunities for the Company, no discussions have advanced beyond a preliminary stage. The Directors expect that certain of the potential acquisitions, in view of their size, may be classified as reverse takeovers under the AIM Rules and as such will be subject to shareholder approval at a shareholder meeting. Application will be made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on 15th January, 2004. Current Trading Hayden's Bakeries Sales are currently ahead of management expectations following the introduction of new products for Waitrose and Marks & Spencers. Following the acquisition of Hayden's Bakeries, weekly sales have increased from £200,000 to £265,000. However, at present there are few signs of a seasonal uplift, as the Directors believe that consumers may be delaying their Christmas related food purchases. Capital expenditure for a new laminating plant has been approved and an accelerated plan for further investment to reduce direct labour costs is currently under review. Eurofoods/Cool Fresh Sales are currently behind management expectations as a result of further customer rationalisation. However, margins are curently in line with expectations. Sales to our major customer, Caffe Nero, continue to improve in line with the roll-out of its new stores. Eurofoods has also commenced the supply of products to Caffe Nero's Scottish stores and will continue to support it throughout its planned roll-out strategy within the United Kingdom. Discussions are at a preliminary stage to acquire the business and assets of a company operating in this sector, which, if completed, should significantly increase the revenue of the division following some necessary rationalisation. Seriously Scrumptious Whilst sales are in line with management expectations, which include an increase in the volume of Christmas cakes being supplied to Waitrose, margins are lower than budgeted, as a result of an overlap in running costs at the sites in Glastonbury and the manufacturing activity at Hayden's Bakeries. On a positive note, the new factory was opened on time and in line with its budgeted cost and the Directors are confident that technical approval will be obtained from the British Retail Consortium in the short term. A website has also recently been launched to enable us to sell direct to our customers which can be found at www.seriouslyscrumptious.co.uk. Further Enquiries The Real Good Food Company Plc John Gibson Tel: 01380 733100 J M Finn & Co. Sam Smith Tel: 020 7628 9688 John East & Partners Limited Simon Clements Tel: 020 7628 2200 This information is provided by RNS The company news service from the London Stock Exchange
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