The Real Good Food Company announced improved sales for its bakery ingredients and bakery divisions in its preliminary results for the year ended 31 December 2008. However, increased costs have seen its profit take a hit.

The company’s total group sales from continuing operations have fallen by 5.4% to £218.7m (2007: £231.1m). Profit before taxation and exceptional items stood at £0.89m (2007: £3.97m). However, significant exceptional costs relating to refinancing and business reorganisation amounted to £1.96m.

The company’s sugar division continued to be affected by “competitive market conditions” and experienced a 7% drop in revenue.

Sales within its bakery ingredients division rose by 9.2% to £35m, and the company said “a marginal increase in revenue” was achieved by its bakery division. The company said sales within bakery were benefiting from its expansion into foodservice.

“During the course of 2008, we continued to experience very difficult trading conditions, which deteriorated more significantly in the final quarter, said chairman Pieter Totte.

“The Board looks forward to the rest of the year and anticipates the benefits of its restructuring programme and low interest rate charges to deliver a result, which we anticipate will be reflected in an improved financial performance over the prior year.”