Real Good Food confident about Christmas trading

The food manufacturer’s executive chairman Pieter Totté will tell the AGM today that the firm is “very satisfied”​ with the way the new financial year has started.

“Pleasingly, our cake decorating businesses continue to perform well, showing good EBITDA ​[earnings before interest, taxes, depreciation and amortisation] growth with our most recent acquisition, Rainbow Dust, making a healthy contribution,”​ he said.

Fall in revenue ​

Group revenue dropped from £110.2M to £104.9M for the 52 weeks to March 31 2015.

Totté attributed a fall in total group revenue on a like-for-like annual basis to continued commodity price deflation, particularly in both the dairy and sugar markets. This affected RGFC’s Garretts Ingredients subsidiary.

“​Despite this, the three pillar business strategy we announced at the time of our year end results is working well and overall trading for the group is currently in line with market expectations,”​​ he said.

“​We look forward to the key autumn and Christmas season with confidence.”​​

The £34M sale of Napier Brown to French firm Tereos took place on May 19, seven weeks after the year end. The reported revenue for the group including Napier Brown for the full year to March 31 2015 was £232.9M.

Encouraging ​

Market analyst Hardman & Co said current trading was encouraging.

Real Good Food has transformed its prospects through corporate action over the past nine months, it said.

“The market has yet to catch up with this. Even more importantly, the mix of business is biased to higher margin and growth markets – added to which export markets are being more systematically addressed recently.” ​

Hardman & Co estimated “significant long-term growth prospects”​ after the initial significant margin expansion for the financial years ending 2016 and 2017.

Earlier this month, RGFC announced plans to restructure its share capital​ in a bid to raise £71.3M and cancel its debt.