Food group sells business to management team

Liverpool-based Real Good Food today announced that it has completed the sale of RGF Patisserie, trading as Chantilly Patisserie, to its management team in a deal worth £200,000 in cash.

The MBO team will pay £100,000 on completion and a further £50,000 on each of the first two anniversaries of the sale.

The cash proceeds will be utilised for working capital purposes within the group.

Chantilly has been producing frozen desserts from its premises in Paignton, Devon for 20 years, and was carved out from Haydens Bakery Limited prior to Haydens’ disposal to Bakkavor Group back in September 2018.

In the group’s financial year ended March 31, 2018, Chantilly contributed £2.40m of revenue, and incurred a loss before non-recurring items and tax of £0.25m, and a pre-tax loss of £0.32m.

At the date of the carve out, the net assets of RGF Patisserie amounted to £0.09m.

The group expects to incur an accounting profit on disposal of approximately £0.06m and a write-down of parent company reserves at March 31, 2019 of approximately £0.06m.

Following this disposal, and those of Haydens, Garretts and R&W Scott, RGF said it is now free to focus its full attention and resources on growing its two profitable, continuing businesses which together now comprise the majority of the group, cake decoration (Renshaw and Rainbow Dust) and ingredients (Brighter Foods).

Having transformed the group’s financial position as a result of these disposals and other financing activities, the financial resources are now available to fund this growth.

Last month the food products company announced interim losses, falling revenue, and a disposal.

During the six months to September 30, revenues fell from £31.9m in 2017, to £30.4m.

Pre-tax losses widened from £3.4m last year, to £9.1m, which includes a £6.3m goodwill impairment charge.

And it announced a further disposal in its R&W Scott division, to its management team, for £3.95m.

In total, three disposals completed since the year end, of Garretts, Haydens and R&W Scott, raised a total of £17.8m, of which £10.1m was received in cash, £7.2m was the assumption of third-party debt, and £500,000 deferred.