Real Good Food Co posts £1.3m pre-tax loss, but remains upbeat about prospects for second half
The firm blamed an 11% slump in sales to £90.7m over the period on lower sugar prices following last year’s reference price change and the withdrawal from low-margin contracts.
However, tightening supplies were expected to lead to a recovery in pricing levels at the start of the new contract season in October, making the outlook for RGFC's Napier Brown sugar operation "very encouraging", said chairman Pieter Totté.
Plans were also in place to broaden the sugar supply base and invest in its Normanton manufacturing site to “provide customers with a broad range of sugars in whatever format they require”, he said.
"The outlook for sugar is very encouraging, with expectations of increased volumes across all sectors rising further in 2011 as Napier Brown's competitive advantages in terms of product range, service to customers, supply security and ability to manage complexity all come to the fore”.
Improved profitability at Renshaw
Meanwhile, RGFC had seen strong sales growth in its baking ingredients business Renshaw, where profitability had also “improved significantly”, he said.
“At Renshaw we are benefiting from the combination of growing export sales, particularly to the US, together with the growing popularity of home baking and sugar craft in the UK.”
The turnaround plan for its cakes and desserts business Hayden's Bakeries was also on track, he said.
“First half sales rose by 20% and we are investing in the future through a plant modernisation programme and the establishment of a large distribution centre adjacent to the existing premises.
“Looking to the seasonally-stronger second half, all major sales initiatives for the period have been agreed with customers, action is being taken to recover material cost increases, while completion of the new distribution facility is on track for quarter one of next year.”
