Manufacturer Real Good Food on verge of collapse

Liverpool food ingredients business Real Good Food close to collapse with more than 100 jobs at risk. Tony McDonough reports

cupcakes, cakes, baking
Real Good Food exports food and cake ingredients all over the world


Liverpool food ingredients business Real Good Food (RGF) is close to collapse with directors set to appoint administrators.

In a move that puts more than 100 jobs at the Toxteth-based manufacturer at risk, on Tuesday afternoon RGF filed a notice of intention to appoint administrators and suspended its shares on the Alternative Investment Market.

Less than two weeks ago the business brought turnaround specialists Interpath Advisory after a long period of tough trading and sustained losses.

In September RGF revealed annual pre-tax losses of £9m in the year to March 31, 2023, a big improvement on the £19m loss reported in 2022. The results also showed a 9.8% fall in revenue to £32.4m.

It has also disposed of Rainbow Dust Colours, its cake decoration supplies division, to European Fermentation Products for £800,000.

This left just its cake and food ingredients business, JF Renshaw. RGF said this month that given the “challenging environment” and “cash flow constraints” its options “may include the sale of the shares or the business and assets of JF Renshaw as well as sourcing necessary external funding”.

Prior to the sale of Rainbow Dust Colours, RGF operated two divisions. Renshaw offers cake ingredients such as sugar paste, marzipan and icings while Rainbow Dust Colours sells edible cake decorations and exports all over the world.

Despite a brief recovery following COVID, the business hit “significant headwinds” as its cost base soared by 20%. It put in place a “radical” transformation plan.

This saw its Liverpool workforce reduced during the period by 45% from 318 to 201. As of late September this figure stood at 186. 

In a statement to the stock exchange on Tuesday, RGF said: “As announced on November 17 the board had carefully reviewed its management accounts and working capital position, as well as the expected sales in November and December.

“It was noted that performance had been constrained by supply issues and cash constraints which are continuing and that sales in November and December were expected to be lower than previously forecast.

“This led the board to conclude that it is in the best interests of all stakeholders to explore strategic options for its remaining business JF Renshaw.”

The statement added: “The board has concluded that the likelihood of a solvent sale of the business and assets of JF Renshaw is very limited within a constrained timeframe.

“Given the impact of the current operating environment on the group, the group’s limited working capital position and the consequential uncertainty regarding the group’s financial position, the board and the JF Renshaw Board have each concluded that it is required to take the necessary steps to preserve value for creditors.

“The board and the JF Renshaw board have each therefore filed a Notice of Intention to appoint administrators this afternoon, with a view to appointing Richard Harrison and Will Wright of Interpath Advisory, as joint administrators within 10 business days.

“Should administrators be appointed, the outcome to creditors of the group is currently uncertain.

“Given the circumstances, the capital structure of the company and options open to it, the board believes that there will be no return to shareholders whether via a solvent sale of JF Renshaw or any procedure in an administration.”

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