REG - Real Good Food PLC - Year End Trading Update

Real Good FoodAnnouncement

20/04/2022 07:00

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RNS Number : 6510I  Real Good Food PLC  20 April 2022

20 April 2022

 

Real Good Food plc

("RGF" or "Group")

 

Year End Trading Update

 

Real Good Food plc (AIM:RGD) today provides the following update on trading
for its financial year ended 31 March 2022.

 

Trading update

Revenue for the year ended 31 March 2022 was £40.5m, an increase of 9.0% on
last year, but below the pre-pandemic prior year. Adjusted EBITDA was just
under £0.7m compared to £0.2m in FY21, equating to an expected, much
reduced, Loss before tax of £2.8m (2021: Loss before tax £6.1m). Overall,
this performance is below that which the Board had anticipated exiting the
half year.

 

Unaudited numbers:

 

                           FY22                                                 FY21                                                 FY20
 £'m                       Cake Decoration  Head Office  Continuing Operations  Cake Decoration  Head Office  Continuing Operations  Cake Decoration  Head Office  Continuing Operations
 3rd Party Revenue         40.5             -            40.5                   37.3             -            37.3                   41.2             -            41.2
 Adjusted EBITDA           0.9              (0.2)        0.7                    0.3              (0.1)        0.2                    1.4              (3.1)        (1.6)
 (Loss)/Profit Before Tax  (0.7)            (2.1)        (2.8)                  (2.2)            (3.9)        (6.1)                  (1.4)            (8.7)        (10.2)

 

*Continuing operations comprise JF Renshaw and Rainbow Dust Colours; excludes
Brighter Foods Limited which was sold on 11 May 2021.

** Excludes goodwill impairment charges.

 

As previously reported, the Group performed strongly in H1 reporting revenue
and EBITDA well ahead of prior year and back to pre-Covid levels (H1 FY20).
However, revenues during Q3 (October - December 2021), the Group's seasonally
busiest period, were disappointing and well below expectations due to severe
shortages and erratic deliveries of key ingredients and services, compounded
by high absence rates because of the Omicron variant; inevitably this affected
the Group's ability to fulfil customer orders and the business continued to
work closely with customers during this difficult period.

 

Trading in Q4 and in the first weeks of our new financial year continued to be
impacted by these shortages and absences, whilst significant input cost
increases have also dragged profitability down. RGF will continue to focus its
efforts on products that are profitable and pass these unprecedented cost
increases (in sugar, palm oil, energy, packaging and transport) through to its
customers, but there is a lag effect of a few months. Overall, revenue in H2
was 7% lower than the prior year. Adjusted EBITDA for H2 was marginally
positive (FY21: £0.8m).

 

Net debt as at 31 March 2022 was £25.3m (2021: £48.6m), a reduction of
£23.3m during the year. The sale of Brighter Foods Limited on 11 May 2021,
for cash proceeds to the Group of £35.6m, enabled £23.1m to be repaid to
Loan Note Holders and £8.5m to be paid into the pension scheme to fully fund
it on an ongoing basis. Cash from operations showed a net inflow of £0.3m.

 

Outlook

Given the challenging environment in terms of both cost and demand pressures,
the Board is focused on reducing complexity and waste, other cost saving
projects and selective new product launches to make the business as
competitive as possible. With a significant milestone due in 2023 relating to
the repayment of borrowings, the Group is focused on improving performance to
meet these obligations.

 

Mike Holt, Executive Chairman commented:

 

"The last few months have been very difficult due to a number of issues
relating to costs, supply chain and unavoidable staff absences leading to our
performance for the financial year just ended being worse than we had hoped.
The unprecedented cost increases being experienced by all businesses are being
passed through to our customers but there is a timing lag which is impacting
profitability. The Group is determined to hunker down, control costs and
protect revenues, and has the support of its Loan Holders and major
shareholders to navigate this difficult time."

 

Enquiries:

 

 Real Good Food plc                                 Tel: 0151 541 3790

 Mike Holt, Chairman

 Maribeth Keeling, Group Finance Director

 finnCap Limited (Nomad and Broker)                 Tel: 020 7220 0500

 Carl Holmes / James Thompson (Corporate Finance)

 MHP Communications (Financial PR)                  Tel: 020 3128 8793

 Reg Hoare                                          rgf@mhpc.com

 About Real Good Food

 Real Good Food plc is a food manufacturing business serving several market
 sectors including retail (own label and private label), manufacturing and
 export.  The Company has two businesses, Cake Decoration (Renshaw and Rainbow
 Dust Colours) and Food Ingredients (Brighter Foods), with leading brands in
 their chosen markets. http://www.realgoodfoodplc.com
 (http://www.realgoodfoodplc.com/)

 

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