Real Good Food Company serves up strong half year performance

Thursday, Jul 29 2010 by
3
Real Good Food Company serves up strong half year performance

Bakery ingredients group Real Good Food Co (LON:RGD), has reported “good trading progress” during the first six months of the year, with a continuation of strong sales growth at Renshaws, its baking ingredients business, and at Hayden's Bakeries. Lower prices have impacted overall turnover in the Napier Brown sugar business, but a tightening of the supply position is expected to lead to a recovery in pricing levels at the start of the new contract season in October.

Napier Brown is the largest independent non-refining distributor of sugar in Europe, while RGF’s other businesses supply bakery ingredients and manufacture sweet bakery products for a range of major retail customers. During the first half of the year the group maintained its strong focus on cash during the half year, and achieved a £1.5m reduction in working capital year on year, while total group borrowings are £2.3m (8%) lower than June last year.

RGF’s sugar business is in a transitional year, following the EU sugar regime changes, and has experienced significant pressure on retail prices, where margins have been tight during this year. However, the tightening supply position is expected to push prices up during the second half of this year. Elsewhere, Renshaws has continued to see growth in volumes and profitability at levels well above management expectations, with sales overall up 14% year on year. Key features of this improvement have been strong export sales and the growing popularity of home baking and sugar craft in the UK. A range of new branded products are being launched during the second half of the year, traditionally the key sales period for this business.

Finally, a newly-assembled management team at Hayden's Bakeries is achieving a turn-around of this business, with overall sales up 20% in the half year and plans for expansion into additional premises and modernisation of the plant well under way. Like Renshaws, the all-important sales period for this business is the pre-Christmas final quarter of the year.

Pieter Totté, RGF’s executive chairman, said: “I am delighted by the ways in which we are starting to realise the full potential of our three businesses. At Renshaws we are successfully exploiting the growing market at home and overseas for home baking, as well as building a branded business; at Hayden's we are building ever stronger relationships with our key customers, and…

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Real Good Food plc is a food manufacturing and distribution company. The Company is engaged in the sourcing, manufacture and distribution of food to the retail, foodservice and industrial sectors. The Company's segments include Cake Decoration, Food Ingredients and Premium Bakery. The Company’s Cake Decoration segment manufactures, sells and supplies cake decoration products and ingredients for the baking sector in the United Kingdom and abroad. Its Food Ingredients segment manufactures and supplies a range of food ingredients, such as chocolate coatings, sauces, jams, dry powder blends and snack bars to the retail, wholesale and foodservice sectors. Its Premium Bakery segment manufactures, sells and distributes bakery and dessert products to the United Kingdom retailers and foodservice customers. more »

LSE Price
6.75p
Change
-6.9%
Mkt Cap (£m)
6.7
P/E (fwd)
n/a
Yield (fwd)
n/a



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