Trading Update

RNS Number : 0501J

Real Good Food PLC

01 April 2015

 



Real Good Food plc (AIM: RGD)

Trading Update

Real Good Food plc ("Real Good Food" or the "Company" or the "Group") is a diversified food business, serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Company is a major distributor of sugar in the UK through its Napier Brown subsidiary, and manufactures a wide range of baking ingredients, jams and sweet bakery products. Its brands include Whitworths Sugar, Renshaw and R&W Scott.

The well-publicised reductions in EU sugar market prices are continuing to make trading difficult for both Napier Brown and Garrett Ingredients. Following a very poor first half, Napier Brown has returned to profit but, notwithstanding the improved trading in the second half, has unfortunately remained behind expectations for the year. The rest of the Group has performed strongly and ahead of management expectations, with Renshaw and Haydens in particular performing well. The Group has, in addition, incurred significant one-off transaction costs as well as legal costs in relation to the discussions with the UK and EU Competition Authorities.

The Company is in discussions with several parties in relation to a potential transaction involving Napier Brown. Such a transaction, if successfully concluded, would enable the Company to significantly strengthen its balance sheet and focus on more stable earnings growth going forward. A further update will provided in due course.

Overall, as a result of the above, the Company expects reported earnings, prior to any adjustments for one-off costs or restructuring of the Group, to be significantly behind current market expectations for the year ending 31 March 2015.

Pieter Totté, Executive Chairman, comments:

''The difficulties in the sugar market have been covered extensively elsewhere but there are signs that prices have reached their low point and will recover over the next two years. As stated above, we are examining options for our sugar business. Elsewhere I am delighted with performance in two areas in particular: in cake decoration, Renshaw has performed very strongly and our recent acquisition of Rainbow Dust Colours is already giving us sales opportunities both in the UK and across Europe, while in premium bakery, Haydens has continued to trade well, successfully expanding its customer base. We plan to give additional focus to these attractive sectors over the coming year.''

ENQUIRIES:

Real Good Food plc
Pieter Totté, Chairman	Tel: [phone]
Andrew Brown, Marketing Director	Tel: [phone]
Mike McDonough, Finance Director	Tel: [phone]
Shore Capital & Corporate (Nomad and Joint Broker)	Tel: [phone]
Stephane Auton Patrick Castle
Daniel Stewart and Company Plc (Joint Broker)	Tel: [phone]
Martin Lampshire
Cubitt Consulting	Tel: [phone]
Gareth David

 

END

 

 

TSTPKDDQQBKDNNN