Food ingredients and cake decoration business Real Good Food employs hundreds of people in Liverpool and says it has significantly reduced its annual losses to £6m. Tony McDonough reports
Liverpool food ingredients and cake decoration business Real Good Food (RGF) is reporting full-year pre-tax losses of more than £6m – a big improvement on the £23m loss reported a year ago.
Based in Toxteth RGF operates two businesses. Renshaw offers cake ingredients such as sugar paste, marzipan and icings while Rainbow Dust Colours sells edible cake decorations. A third business, Brighter Foods which made snack bars, was sold to Hut Group in May for £43m.
In its full-year results for the 12 months to March 31, 2021, RGF reporting a fall in revenues from £41.2m in 2020 to £37.3m. It’s underlying EBITDA, an alternative measure of profitability, was in the black by £800,000.
At the end of the financial year net debt stood at £48.8m, up from £45.4m in 2020. However, following the sale of Brighter Foods the company was able to reduce its net debt by £26.4m.
Renshaw and Rainbow Dust Colours launched 66 new products in the 12-month period with customers such as Marks and Spencer, Tesco, Asda, Aldi and more recently with Lidl.
Current group revenues and profit are in line with the board’s expectations, and ahead of pre-pandemic levels for the first five months of the new financial year, with good retail and international sales.
RGF is also planning to delist from the Alternative Investment Market. This will save the business around £150,000 a year in costs. The volume of shares traded is very small and an AIM listing adds a disproportionate expense and burden on the company.
Executive chairman Mike Holt said: “Much has happened since March 31, 2020, in terms of making progress and restoring shareholder value. The group has coped with the challenges of covid and has continued to improve underlying profitability.
“In addition, the debt burden was halved following the successful sale of Brighter Foods. Renshaw and Rainbow Dust Colours, our two remaining businesses, continue to improve their performance, and after a good start to the year, prospects are encouraging.”