RGF expected to report earnings before interest, taxes, depreciation and amortisation (EBITDA) of £2M for its full year to March 31. On June 29, the manufacturer announced expectations of £5M EBITDA for the year.
Two “substantial anticipated claims” about sugar purchases hadn’t had their desired effect, meaning RGF wouldn’t hit its forecast profit figures, it said. Some development costs should also have been expensed more appropriately, the ingredients firm said.
EBITDA £2.3M lower than expected
The business also expected the current financial year’s EBITDA to be about £2.3M lower than expected. A delay in injection of funds delayed the manufacturer’s expansion plans, and combined with “slightly softer trading conditions” in the first quarter, it lowered its EBITDA forecast for the 12 months to March 31 2018.
“However, the anticipated benefits of these projects remain robust and are expected to be fully realised in the financial year ending March 31 2019,” said a RGF statement.
The manufacturer also revealed that consultancy service payments to certain directors, totalling about £1.9M, hadn’t been disclosed.
Non-executive director resigns
RGF also announced that non-executive director Peter Salter had resigned.
Share prices dropped 42.5% in value to 20.7p in early trading on Tuesday (August 1) – its lowest value since May 2010.
RGF now expected to announce its full-year results to March 31 at the end of August.
The latest profits warning came after the manufacturer revealed a similar notice in February, last year. At the time, it claimed a company restructuring programme had a short-term negative impact on its profit margins.
Real Good Food profits warning – at a glance
- Two “substantial anticipated claims” about sugar purchases didn’t have desired effect
- Delay in injection funds for expansion
- About £1.9M undisclosed consultancy payments to directors