Further profit warning from Real Good Food

Baking ingredients firm Real Good Food has slashed its profit forecast still further to EBITDA of £1m.

This follows a profit warning at the beginning of August saying its expectations of clearing £2m were half what it originally predicted.
Further profit warning from Real Good Food

The London-based company recently announced a £7m investment into its Renshaw’s manufacturing plant in Liverpool, but then announced the departure of its founder and chief executive Pieter Totté.

Totté was named as one of two directors who were named as having received payments for consultancy services which had not been separately disclosed. He received £250,000 in 2014, 350,000 in 2015 and £1.21m in 2016.

The London-based company also announced the appointment of Harveen Rai as financial director and company secretary.

A statement from the company said: “Since the announcement of 1 August, a review has been undertaken, under the guidance of the company’s new finance director, which is now expected to lead to additional audit adjustments relating to inter-company trading and consolidation.

“As a result of these additional adjustments, the board now expects EBITDA for the year ended March 31, 2017 to be in the region of £1m.

“The company’s banking facility is subject to customary terms, conditions and covenants which are tested quarterly, with the next date at which the company’s banking covenants will be tested being September 30, 2017. The board is in discussions with its bankers to vary certain conditions of this facility to reflect the company’s recent and anticipated trading.

“In addition, the board is pleased to announce that its major shareholders, NB Ingredients Ltd, Omnicane International Investors Ltd, and certain funds managed by Downing LLP have confirmed that they will, if required, provide additional funds to support the Company’s working capital requirements.”