Renshaw and Brighter Foods owner Real Good Food (RGF) has rationalised ranges and furloughed staff as the Covid-19 outbreak impacts demand for its products.
Announcing its full-year trading to 31 March, the company reported revenue had been “broadly in line with the board’s expectations”, rising 9% to £67m, but had been hit in March by the effects of coronavirus.
Adjusted EBITDA rose 178% to £5.4m, thanks partly to further cuts in head office costs.
Brighter Foods’ revenues were up year on year by 67%, with the business securing a new contract with a global customer, which started in January, and benefiting from continued organic growth with existing customers.
However, Renshaw’s cake decorations market has come under pressure, reported RGF, with the sugar paste market down 14.7% year on year [Kantar to December 19] and marzipan down 2.1%.
RGF said Renshaw was well-placed to tap growth in the frostings market following recent investment.
The company reported that Covid-19 was expected to have an impact on sales in at least the first quarter of the new financial year. In terms of the sectors the business serves, it reported that:
- The manufacturing sector was set to maintain or grow sales
- The wholesale sector had declined as the restaurant and leisure sectors closed premises
- Retailers were focused on stocking ‘essential’ products and had rationalised some niche products and colours.
RGF is planning production in consultation with its customers to rationalise product ranges.
Demand for snack bars, Brighter Foods’ key market, has fallen as social distancing guidance impacts the food-on-the-go and forecourt sectors. The business has also been hit by challenges in the nutrition and diet sector.
Within Renshaw, the business has furloughed around 140 staff across all functions for an initial period of three weeks under the government’s Coronavirus Job Retention Scheme.
For remaining staff, RGF is following all government guidelines, with most back-office staff now working from home and risk assessments completed in terms of social distancing at manufacturing sites.
RGF said it had a robust crisis management plan and that, when the pandemic first appeared, it reviewed its suppliers in China and sourced alternatives in Europe.
“We are grateful to our staff and stakeholders as we work together through this challenging period,” said non-executive chairman Mike Holt.
“The budgets we were signing off just a short time ago are now being updated to include all the measures we are taking to ensure that the group has a sustainable business going forward. We believe the food industry is resilient and that Real Good Food is well placed within the segments we serve and given the quality of our products and operations.”