Sugar hurts Real Good Food profit, but outlook good

Real Good Food
Real Good Food company has shed Napier Brown
  (Photo:  )

The bakery group Real Good Food made an operating loss of £741,000 last year after it was hit hard following a dispute over sugar. 

The company disposed of its sugar division Napier Brown for £34m just after the end of its financial year, however said its performance for the 12 months to 31 March 2015 had been “dominated by the market issues in sugar”.

However, it said that aside from the sugar issue, which also impacted Garrett Ingredients, performance had been strong and excluding Napier Brown it had seen its ebitda, or underlying profit, increase by 8% from £4.9m to £5.3m.

Revenues from continuing operations dipped 5.1% to £104.6m, but operating profit for continuing operations rose to £3.2m from £2.7m in the prior year.

Pieter Totté, executive chairman, said: "The total group figures for last year were dominated by the market issues in sugar which impacted both Napier Brown and Garrett Ingredients. Elsewhere performance has been strong, with Renshaw and Haydens in particular growing both sales and profitability.

 “Importantly, the group excluding Napier Brown grew its operating profit from £2.7m to £3.2m. Net debt was well controlled at £30m at the balance sheet date and following the sale of Napier Brown, the business now has significant positive net cash balances.

“We are now focused on three core market sectors: cake decoration, food ingredients and premium bakery.  The ongoing business is debt free, profitable and cash generative.

“Overall, the business is in good shape and we look forward with great optimism."

A statement said: “The disposal is transformational in removing the uncertainty around the future of Napier Brown as it approaches further structural change in the sugar industry in 2017. In addition, it effectively clears the group's total debt position of approximately £30m leaving the group well placed to focus on the remaining more added value activities.”

Group revenue was also down in the year to 31 March 2015 from £272.6m the previous year to £232.9m.

Renshaw performed well with EBITDA increasing to £6.3m, more than £800,000 up on the previous year. Haydens Bakery also posted strong results with EBITDA at £1.25m, up by more than £300,000 on the previous year.

At the start of 2015 Rainbow Dust Colours was acquired for an initial £4m with a contingent consideration of £3.5m.

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