Real Good Food hungry for growth

SLIMMED-down food manufacturer and supplier Real Good Food says it is optimistic for the future having exited the sugar sector.

The AIM-listed company, which sold loss-making sugar business Napier Brown to French co-operative Tereos for £34m last month, said trading in its remaining businesses have started the new financial year in positive fashion and it is looking for possible acquisitions.

Liverpool-based Real Good Food is now focused on  cake decoration (Renshaw, Rainbow Dust Colours), food ingredients (Garrett Ingredients and R&W Scott) and premium bakery (Haydens).

Chairman Pieter Totté said: “Now that the disposal of Napier Brown has been completed, we can focus on developing our other businesses, all of which present growth opportunities.

“The performance of our cake decorating businesses continues to be encouraging, while Haydens is also trading strongly as it broadens its customer base. Our strong cash position will enable us to pursue capital investment plans to support our growth strategies, and we will also consider complementary acquisitions where appropriate.”

In a trading update ahead of its results for the year to March 31 the company said net sales in the period for the continuing business are expected to be approximately £104m and EBITDA in the order of £5.3m, with continued strong performances at Renshaw and Haydens. Net debt at the year end, prior to the disposal of Napier Brown, was £30.1m.

The sale of Napier Brown generated a consideration of £34m, plus estimated working capital at completion of  £7m, resulting in a positive cash position at completion of around £13.7m. Its remaining debt comprises a deferred payment of £2.6m for the Rainbow Dust Colours acquisition and loan notes of £2.8m, while it retains a debt facility of £3.75m with Lloyds Bank.

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