Haydens and Renshaw owner Real Good Food (RGF) has secured additional funding to ease pressure on its cashflow.
The business, which has issued a string of profit warnings in recent months, said it had required “substantial additional funding” for working capital and investment to implement its business plan. It is currently trying to put longer-term funding arrangements in place.
RGF’s three major shareholders – Napier Brown Ingredients, Omnicane International Investors and certain funds managed by Downing LLP – which have previously loaned the business funds, have this week agreed to provide up to an additional £4m
The draw-down loan note facility comprises £1.713m each from Omnicane and Napier Brown, with Downing providing £0.574m.
“The additional funding is an important part of meeting our short-term requirements, and further funding will be required for working capital and investment purposes in order to implement the group’s business plan,” said RGF chief executive Hugh Cawley.
“The raising of these loan notes is part of the longer-term funding plan being pursued by the group.”
In January, the company warned it was set to make a £3.5m earnings loss following poor trading at the end of last year. RGF had previously said EBITDA would be “in the region of break-even”, with an overall loss before tax.
January’s warning follow a troubled period for the business that included a shake-up of its board and an overhaul of its corporate governance procedures.
Although the company’s revenue rose 30% year on year to £63.6m in the six months ending 30 September 2017, it made a £6.7m pre-tax loss.