Profits to remain broadly flat for food ingredients and cake decoration business

Food ingredients and cake decoration business Real Good Food expects profits to remain flat for 2022.

The Liverpool group which operates Renshaw, offering cake ingredients such as sugar paste, marzipan and icings and Rainbow Dust Colours, which sells edible cake decorations and exports all over the world, said it had entered its “seasonally busier second half of the year in good shape.”

However sales in December and January have been much lower than anticipated.

In an update for its current financial year ending 31 March 2022, RGF said this was due to severe shortages, and erratic deliveries, of certain ingredients and services, compounded by staff shortages due to the omicron variant, which affected its ability to fulfil customer orders.

It said the issues are short term and will improve in the coming months.

As reported in the half year results in December 2021, revenue and EBITDA in the first half were both well ahead of last year’s first half performance, with revenue back to pre-covid levels (H1 FY20).

Revenue for the second half of the year is expected to be at a similar level to the second half of last year, despite a pick-up in sales to the wholesale sector.

International sales, which had been expected to show double digit growth are going to be marginally below last year’s numbers.

RGF said: “Overall, with increased costs during the second half of the year, the Group is expected to make a small profit at EBITDA level broadly similar to underlying EBITDA reported in the prior year.”

Cash at the half year was £2.7m, a modest cash inflow is expected to be reported for the second half of the year.