Real Good Food exports food ingredients and cake decoration products across the world from its Liverpool factory and says it is recovering from the COVID-19 crisis despite bigger losses. Tony McDonough reports
Food ingredients manufacturer Real Good Food (RGF) said it lost £3.8m in the first five months of its financial year as revenues plummeted 28% due to the COVID-19 crisis.
From its factory in south Liverpool, RGF exports food ingredients and cake decoration products across the world and throughout the UK. The AIM-listed businesses employs hundred of people at its factory and says it is now close to full employment.
The company’s financial year began on April 1 and revenues to the end of August came in at £27m, 28% lower than in the same period last year. Pre-tax loss was £3.8m, higher than the £1.9 reported last year. This period of the year is typically loss-making for the group inventories build, ahead of the peak period between September and December.
Sales in August were only 7% lower than the same month last year as the impact of the COVID-19 pandemic abated with the limited lifting of restrictions. Sales in its Brighter Foods division have seen an improvement with new orders being taken from customers in the slimming and weight control markets as clubs, which are classified as “organised events”, have restarted.
Sales at Brighter Foods were down 32% compared to last year, but the business remained profitable and cash generative. As expected, revenues were impacted by the restrictions on social gatherings and the move to working from home across the country which affected the entire “food on the go” market.
However, the business has seen a recovery in demand in the last few weeks and anticipates sales being around 5% ahead of prior year for the second half of the year and as a result is expecting to be back to near full capacity by year-end, assuming no new major COVID-19 set-back.
The business has launched 17 new products this year and a further 27 new products have trial and / or launch dates agreed in the near future, including new products with new customers (48 new products were launched last year).
In RGF’s Cake Decorations business sales were 25% lower than last year through to the end of August. The main impact of the COVID-19 crisis was felt within the UK wholesale market and European sales while the UK retail market held-up “reasonably well”.
Demand is recovering and the board expects that sales for the remainder of the year will be at similar levels to last year. Progress continues to be made within Renshaw to become less dependent on the maturing sugar paste and marzipan markets.
Chairman Mike Holt said: “While our businesses have been affected by the ongoing COVID-19 crisis, both Brighter Foods and Cake Decorations are experiencing recoveries in their respective markets.
“Despite the outlook remaining uncertain pro tem, it is encouraging that both businesses have gained new customers and agreed new product launches.”expectations.