Real Good Food upbeat despite profit drop

REAL Good Food Co, the Liverpool-based manufacturer and supplier of sugar and other catering ingredients, has reported a sharp fall in interim pre-tax profits.

In the six months to the end of September sales slipped 5.5% to £130m while pre-tax profits fell from £1.1m to £111,000.

Earnings before interest, tax, depreciation and amortisation (ebitda) were down to £2.2m from £3m.

But the company said this fall was broadly in line with its expectations and reflected a £700,000 investment in brand development and a Brussels office.

The listed company owns ingredients firms Napier Brown, Garrett, Renshaw, jam and bakery ingredients specialist R&W Scott and patisserie maker Haydens Bakery.

Chairman Pieter Totté said: “Once again we approach the key Christmas trading period with the group well placed to benefit from the traditional seasonal boost in sales, and I am pleased with the continued progress we are making in re-shaping the group.

“In Napier Brown we face a significant challenge over the coming months, following the well publicised dramatic drop in EU sugar market prices as we bring our buying book in line with this correction in market prices.

“Meanwhile, however, Napier Brown’s sales volumes, in both the industrial and retail markets have increased significantly from the start of the new contract season in October 2013. We anticipate our Whitworths sugar brand achieving a consumer sales value of more than £100m over the next 12 months.

“Elsewhere within the group our branding and sales initiatives at Renshaw, R&W Scott and Haydens are delivering in line with our expectations and we anticipate that in our next financial year some 25% of group sales will be represented by branded product. This demonstrates how our business model is evolving.”