Real Good Food Co sees cost-cutting benefits

BAKERY ingredients business The Real Good Food Company has said it is starting to see the benefits of its restructuring, although margins in its sugar business are lower than last year.

The company, which moved its headquarters to Liverpool in January when it merged the sugar and bakery ingredients businesses to form Renshawnapier, held its AGM this morning.

It said in a trading update that it was starting to see some stability return, after a long period of “very challenging” trading conditions.

In particular it said changes to the EU sugar regime, and a reduction in the EU sugar production quota, have helped move the sugar market into balance, but added that the industry was still wrestling with the challenges of enhancing margins in a falling market.

It said the merger of Renshawnapier had gone according to plan, with a revised operational and commercial structure, and that it is starting to see overhead savings as a result of the move.

Sugar volumes continue at the lower levels that have been in evidence since last summer, as continued economic pressure restricts sales. Conversely export sales of sugar pastes have seen strong growth, with volumes up 40%, the company said.

Margins in the first half of the year at Renshawnapier were lower than the previous year, although it said some improvements have been seen in the second quarter.

At Hayden’s, the group’s bakery division, new sales to a food service customer, combined with promotional volumes, mean revenues are up 12% up on the previous year.

Chief executive Stephen Heslop said:”The merger of the two principal pillars of the group to form Renshawnapier has gone well and according to plan. This new division is performing in line with expectations, although behind the prior year, while Hayden’s is performing in line with expectations and up on the prior year.

“The board is pleased with the progress the Group has made in the first six months of 2009.”