Real Good Food plans to focus on its cake decorating and bakery arm, the company revealed this morning.

In a pre-close trading update the company, which recently disposed of its troublesome sugar business Napier Brown for £34m, said trading had continued in a positive fashion in the early weeks of the new financial year and it was optimistic about the prospects for the full year.

For the continuing businesses in the financial year ending 31 March 2015, net sales are expected to be approximately £104m and ebitda in the order of £5.3m, with continued strong performances at Renshaw and Haydens.

Chairman Pieter Totté said: “Now that the disposal of Napier Brown has been completed, we can focus on developing our other businesses, all of which present growth opportunities.

“The performance of our cake decorating businesses continues to be encouraging, while Haydens is also trading strongly as it broadens its customer base. Our strong cash position will enable us to pursue capital investment plans to support our growth strategies, and we will also consider complementary acquisitions where appropriate.”

The disposal of Napier Brown generated £34m, plus estimated working capital at completion of £7m, resulting in a positive cash position at completion of circa £13.7m. The group’s remaining debt comprises a deferred payment of £2.6m for the Rainbow Dust Colours acquisition and loan notes of £2.8m, while the company retains a debt facility of £3.75m with Lloyds Bank.