Real Good Food secures £8.87m credit facility

The finance, provided by Leumi ABL, was split into three separate facilities – a £5.45m receivables facility and a £1.3m term loan facility, each with a 60-month term, and a £2.12m plant and machinery facility on a 36-month term.

Of the funding made available for receivables, 82% (£4.5m) will be used to repay debt facilities provided by the company’s three major shareholders – £1.627m to Napier Brown Ingredients, £1.626m to Omnicane International Investors and £1.247m to Downing.

Normalising the business ​

The new arrangements will see a reduction in RGF’s annual interest charge of up to £250,000.

RGF chief executive Hugh Cawley said: “We are delighted with the support we have received from Leumi in the form of the facilities, as we seek to normalise our facilities with a better balance of bank funding and shareholder support. ​

“The bank's support underpins the work the board has undertaken in streamlining the business units of RGF in order to drive the group towards consolidated profitability​. I would also like to thank our major shareholders for the financing they have provided over the past few years to ensure the financial survival of the group as we have worked to turn RGF around.”​

Financial results​

RGF’s new credit facility followed modest financial results for the year ended 31 March 2019. It reported a fall in revenue from continuing businesses of 3.4% to £61.6m, as well as a loss of £26.09m before tax.

Financial pressures have sparked a greater focus on its core business, leading to a number of recent disposals. The past year has seen the sale of frozen desserts firm RGF Patisserie, jam business R&W Scott and Garrett Ingredients.

Meanwhile, in May, RGF was fined £450,000 for breaches to Alternative Investment Market (AIM) rules,​​ reduced to £300,000 when settled early.