Real Good Food Company is to focus on boosting profitability for the next 18 months, as its Napier Brown sugar division recovers from a drop in volumes at the start of the year.

Speaking after the company posted a trading statement last week, chief executive John Gibson said Napier Brown was back on an even keel after a “difficult four months in terms of volume” at the start of 2006.

The difficulties were caused by the competitive nature of the sugar market and Napier’s decision to exit areas of business where margins were thin.

Sales in June 2006 exceeded those for the same month last year. These have come from success in the retail and delivered wholesale sectors, and margins are in line with forecasts.

Napier has also won business in its traditional customer base, including small and medium bakeries, said Gibson.

Real Good Food Company, which also owns Hayden’s Bakeries, ingredients company Renshaw and fish products company Five Star Fish, now plans to “stick to its knitting” to maximise profitability this year and make up for the downturn in the sugar business, Gibson said.

He ruled out making acquisitions for the next 18 months, following its reverse takeover of Napier Brown last year. He commented: “The next few months is all about concentrating on profitability in our four business units. We will then look at our share price before making any further acquisitions.”

Hayden’s Bakeries’ sales volumes are 5% ahead of last year. Additional volumes have been secured from Marks and Spencer and new lines with two new retail customers have been introduced this year.

Progress to date has been slower than expected in improving the cost base, but the company is expecting improvements in the second half.

A new management team at Renshaw has made a significant impact, said Real Good Food. Business lost in 2005 has been regained and factory efficiencies are improving. Sales for the first half are broadly in line with 2005.

Real Good Food Company will post results for the six months to 30 June in late September.

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