REG - Real Good Food PLC - AGM Statement & Trading Update

Real Good FoodAnnouncement

31/10/2023 07:00

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RNS Number : 7599R  Real Good Food PLC  31 October 2023

31 October 2023

Real Good Food plc

("RGF" or "the Group")

 

AGM Statement and Trading Update

 

Ahead of its Annual General Meeting to be held later this morning, Real Good
Food plc (AIM: RGD), the food manufacturing business specialising in cake
decoration, announces a trading update for its current financial year (ending
31 March 2024) to date.

 

After a slow start to the year as we anticipated, the Group is trading well as
it starts its busy seasonal third quarter in the lead up to Christmas. The
benefit from the successful implementation of the Group's radical programme of
reform is tangible and is expected to boost profitability in the coming
months.

 

For the first six months to 30 September 2023, revenues were 2% up overall to
£16.1m compared to the same period in the prior year (H1 23: £15.9m),
reflecting the benefits of our pricing actions, albeit volumes were down circa
10% due to weak market conditions and exiting low margin sales. Revenues in
August and September were £1.0m ahead of the same months last year at £5.9m.
Going into the second half, revenues in October are expected to be circa
£4.6m, 6% above October 2022.

 

More importantly, the unaudited EBITDA loss was much reduced at £0.7m for the
period (H1 23: £2.3m loss). Gross margins, at 35.9% compared to 34.4% H1 last
year, and 33.3% for FY23 full year, continue to improve due to price resets,
more effective pass through of cost inflation (which continues) and self-help
gains from improved cost efficiency. After distribution costs, margins were
26.6% for H1 compared to 22.3% H1 last year.

 

As previously stated, performance during H1 was constrained by supply issues
and cash constraints, which the business is trying to resolve and we remain on
track to deliver circa £8.0m of price resets, efficiency gains and cost
savings for FY24. The Board therefore anticipates reporting a significant
turnround for the full year with EBITDA in the region of £1.0m (FY 23: £5.8m
loss) with an exit run rate of £3m to £4m EBITDA.

 

The Group continues to finalise its agreement with Hilco Private Capital for a
twelve-month extension to its loan agreement with them and a further
announcement will be made once the documentation has been completed.

 

The Board expects to issue the Group's half year results to 30 September 2023
and an update on current trading in December 2023.

 

Mike Holt, Executive Chair commented:

 

"We have made substantial progress since this time last year when the Group
was really struggling. The radical reform programme has delivered significant
benefits and recent senior management changes have also made a real
difference. JF Renshaw is back on form and continuing to improve its
performance. We are now focused on getting the Group to a sustainable annual
EBITDA level of £4m plus moving forward.

 

We thank our suppliers for their patience, and we are working hard to achieve
best-in-class service and product for our customers despite the challenging
market conditions."

Enquiries:

 Real Good Food plc                                Tel: 0151 541 3790

 Mike Holt, Executive Chair

 Cavendish Capital Markets Ltd (Nomad and Broker)  Tel: 020 7220 0500

 Carl Holmes / Abigail Kelly (Corporate Finance)

 MHP (Financial PR)                                Tel: 020 3128 8793

 Reg Hoare / Katie Hunt                            rgf@mhpgroup.com

 

 

 

 

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