Following the release last month of its preliminary results for the year ended March 31 2015, Shore Capital said the results provided further insight as to how the shape of the RGFC business now looked after the sale of Napier Brown.
“We believe [RGFC] is now a re-engineered business that is no longer exposed to the volatility of the EU sugar market, with the deal, achieved at an attractive valuation in our view, leaving the group in a net cash position,” said Shore Capital.
“This provides management with a strong foundation for driving future organic growth, including the recently acquired high-margin Rainbow Dust Colours business, along with the potential for complementary bolt-on acquisitions.”
The analyst expressed optimism about RGFC’s future prospects.
In a pre-close trading statement in June, RGFC boss Pieter Totté announced the group’s intention to focus on growth, partly through acquisitions, following the sale of Napier Brown.
“Now that the disposal of Napier Brown has been completed, we can focus on developing our other businesses, all of which present growth opportunities,” said Totté.
“The performance of our cake decorating businesses continues to be encouraging, while Haydens is also trading strongly as it broadens its customer base.”
The firm’s strong cash position would also enable it to pursue capital investment plans to support the company's growth, as it targetted complementary acquisitions, Totté added.