Losses almost triple to £26m at Liverpool cake ingredients firm

Toxteth business, which is listed on the Alternative Investment Market, saw revenues fall 3.4% to £61.6m but said its turnaround plan was starting to yield positive results. Tony McDonough reports

cupcakes, cakes, baking
Real Good Food supplies food ingredients and cake decoration products

 

Liverpool food ingredients and cake decoration supplier Real Good Food is reporting an annual pre-tax loss of £26m – almost triple last year’s £9m figure.

The Toxteth-based business, which is listed on the Alternative Investment Market, saw revenues for the year to March 31 fall 3.4% to £61.6m but said its turnaround plan was starting to yield positive results.

As part of the plan, Real God Food last year sold Garrett Ingredients, Haydens Bakery, R&W Scott and Chantilly Patisserie and is now focused on two core divisions – cake decoration (Renshaw and Rainbow Dust Colours) and food ingredients (Brighter Foods).

During the 12-month period the firm has reduced costs by £1.3m and, earlier this week, it negotiated an extension on its loan repayments until May 2021 and net debt was £35.7m at March 31. It has also taken a £18.7m hit to its goodwill.

In July Real Good Food, which employs hundreds of people and exports to countries across the world, was fined £450,000 by the London Stock Exchange in a ruling that saw its founder and former chairman come in for heavy criticism. The LSE identified “serious failings” in relation to a trading update in 2017.

Chief executive Hugh Cawley said current trading was in line with the board’s “modest expectations: “After a very difficult period in the group’s history and a great deal of corporate activity, Real Good Food plc now comprises two divisions, with clearly articulated objectives and defined strategies to accomplish those objectives.

“We believe we now have the leadership, the senior management and the resources capable of delivering a further uplift in performance from both businesses, and a substantially lower central cost base more fit for purpose.

“In the new financial year to date, current trading from the two remaining, robust and profitable businesses is in line with our modest expectations for the year. The group remains focused on continuing to improve its results and on reducing net debt, as well as continuing to support the business’s strategy and thereby to increase shareholder value and returns.”

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