Based in south Liverpool, stock market-listed Real Good Food makes cake ingredients and edible cake decorations and has seen revenues surge in the last six months. Tony McDonough reports

Liverpool food ingredients and cake decoration business Real Good Food (RGF) says revenues in the first six month if its financial year were more than 30% ahead of 2020.

In September Toxteth-based RGF reported its full-year results for the 12 months to March 31 which revealed pre-tax losses of £6m. However, this was significantly better than the £23m pre-tex losses recorded the previous year.

RGF operates two businesses. 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. A third business, Brighter Foods which made snack bars, was sold to Hut Group in May for £43m.

The business is listed on the stock exchange’s Alternative Investment Market although it said in September that it is considering delisting in a move that would save it around £150,000 a year in costs.

In its latest taking update, RGF says revenues in the six months to September 30 were 30.8% ahead of the same period in 2020 and 0.7% above the same period in 2019. Sales to UK retailers are performing particularly well, with growth of 12.9% on last year and 3.7% on the year before last.

Unaudited EBITDA (an alternative measure of profitability) for the six months was £500,000 compared to an EBITDA loss of £1.4m last year, and an EBITDA loss of £200,000 for the six months to September 30, 2019, respectively.

This is reflective of the group’s actions to increase margins within each business unit. However it added margins are being affected by surcharges on freight and transport which are currently expected to take around £300,000 from its full-year profits. 

The biggest impact of these logistics challenges, coupled with ongoing staff absence rates from COVID-19, is on order fulfilment and on-time delivery which is an issue shared across the industry and supply chain.

New product innovation is a key driver to performance and increasing profitability. Revenue for the six months to September 30 include 39 new products with sales of £500,000 (£1.4m annualised).

Executive chairman Mike Holt said: “We have made a good start to the year and the group is well positioned for the seasonally busier second half of the year. It is pleasing to see the turnaround activities within JF Renshaw gaining traction, particularly in new product innovation.

“Renshaw has regained its reputation as the product innovator and first choice supplier of quality products, both branded and private label.”