Weeks after securing a £2.5m cash life line troubled Liverpool food ingredients business Real Good Food reveals further losses as it looks to ride a ‘perfect storm’. Tony McDonough reports

Market conditions for Liverpool food ingredients business Real Good Food (RGF) remain “challenging” with “no sign of easing in the near-term”.

That is the stark assessment from the executive chairman of the struggling Toxteth-based manufacturer as it reveals a pre-tax loss of £3.8m for the six months to September 30. This compares to a loss of £1.2m for the same period last year.

Stock market-quoted RGF also said revenues for the half-year were 20.1% down on 2021 at £15.9m. Ongoing availability of key ingredients has also negatively impacted performance although this has eased in recent weeks.

In a statement to the stock exchange in early October, RGF said there was “material uncertainty which may cast significant doubt” on its ability to keep trading as it battled with soaring costs.

It operates two businesses from its Liverpool factory. 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.

In November the firm said it had secured a £2.5m cash lifeline. This is being provided by Hilco Private Capital for a term of 12 months and supplements the existing £6.3m facility with Leumi ABL.

On Friday RGF said reduced volumes and the lag effect of passing cost increases through to customers reduced gross margins to 34%, against 43% last year. It has implemented a “radical” reform programme has been launched to return the business to profitability.

Executive chairman Mike Holt said: “Market conditions have been very challenging over the last 12 months, and show no sign of easing in the near-term, due to a perfect storm of rising costs and lower revenues.

“The group is not just hunkering down. It has put into effect a radical programme of reform to return it to profitability and to ensure that profits will be sustainable.

“New funding has been secured to provide the headroom to make these transformational changes. The board is confident that the right actions are being taken and that they will deliver positive returns.

“The simple truth, a crisis was needed to enable the required changes to be possible.”