Real Good Food upbeat despite losses of £4m

Based in Liverpool, Real Good Food sells food ingredients and cake decorations all over the world and has seen trading hit by the COVID-19 pandemic. Tony McDonough reports

cake, doughnut, icing, decoration, food, ingredients
cake, doughnut, icing, decoration, food, ingredients


Food ingredients business Real Good Food (RGF) is reporting widening pre-tax losses of £4m for the six months to September 30, 2020, due largely to the COVID pandemic.

However, the Liverpool-based stock market-listed firm, which employs hundreds of people at its Toxteth factory, has struck an upbeat tone with a recent upturn in trading and a range of new products.

RGF comprises two distinct divisions. Renshaw is its long-standing cake ingredients and decoration manufacturer and supplies customers in the UK and across the word. Its production base is in Toxteth in south Liverpool.

It’s other division is Brighter Foods, which creates, develops and manufactures snack bars for the healthy snacks market. It operates from manufacturing facilities in Gwynedd in mid-Wales.

During the six-month period, which coincided with the start and initial peak of the pandemic, RGF said lockdowns and restrictions had contributed to a 26.4% fall in revenues to £23.9m. This impact was partly mitigated by cost savings, new business and the Government’s furlough scheme.

Pre-tax loss for the period was £4m, compared to a loss of £2.5m in the same period of 2019. Underlying adjusted EBITDA, an alternative measure of a company’s margin, was £300,000, a big drop on the £2.8m achieved in 2019.

Net debt at September 30 stood at £45.1m, against £39.9m at the same point in 2019. Most of the debt is shareholders loans. RGF’s Credit facility with Leumi ABL increased by by £2m to £10.9m to provide additional headroom during difficult trading conditions.

Renshaw’s underlying adjusted EBITDA showed a loss of £600,000 against a profit of £600,000 the year before. Revenues from the wholesale and sugarcraft markets (both in the UK and Europe) were down significantly on the prior year with restaurants and consumer outlets experiencing shut-downs and restrictions.

Underlying adjusted EBITDA at Brighter Foods was £1.1m during the half-year period, against a figure of £2.5m in 2019. Revenue in the six-month period was £4m lower than the first half of last year, having been impacted by revenues at its largest customer reducing by £4.8m due to the COVID-19 lockdowns.

However, both businesses have continued to innovate with a total of 35 new products being launched by Brighter Foods and 40 by Renshaw with anticipated annual revenues of £8m and £2m respectively.

RGF executive chairman Mike Holt said: “Although the group inevitably had a difficult first half, due to the impact of COVID-19 and Brexit uncertainties, as reported earlier this month, Q3 performance was much improved on the first half and in-line with last year.

“Both our businesses are getting stronger and more resilient due to operational efficiencies made during the last 12 months. Once COVID-19 restrictions are lifted, Brighter Foods is well-placed to continue the growth reported in full year 2020.”

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