While the company reported a pre-tax loss of £2.5m in the six months to 30 September 2019, this was down from a £9.08m pre-tax loss reported for the same period in 2018. This represented total costs of £34.9m against sales of £32.4M.
The manufacturer offset its losses with a £8.87m credit facility, provided by Leumi ABL, in August this year. The finance was split into three separate facilities – a £5.45m receivables facility and a £1.3m term loan facility, each with a 60-month term, and a £2.12m plant and machinery facility on a 36-month term.
Reducing debt
Shareholder debt for the company was reduced by £4.5m and, while the RGF’s debt still remains high, it said the refinancing has provided stability for the business to move forward and invest in growth.
Commenting on the results, non-executive chairman Mike Holt said the business had made significant progress over the past six months. This was especially evident within its food ingredients business, where capacity had doubled and is almost fully utilised with strong order intake and commitments from both new and existing customers.
“While cake decoration has had a difficult period, its new chief executive has launched a major improvement programme focussed on developing strategic partnerships with customers and distributors and driving fundamental operational improvements, the benefits of which are beginning to come through,” Holt added.
Two core businesses
“The group now has two core businesses with clear growth strategies and the leadership and resources to deliver upon them. With a lower cost base in place and the group’s improving performance increasingly evident, the board is confident of delivering further progress in the second half and beyond.”
Looking ahead, RGF was confident that the future of both its cake decorating and ingredients divisions were justifiably bright.
“After two challenging years in the period to 31 March 2019, the board wishes to thank all the group’s and businesses’ stakeholders for their understanding and patience to date,” Holt added. “We are now entering a period when the rewards for that patience should start to become evident.”
