LONDON (Alliance News) - Real Good Food PLC said on Friday its pretax loss widened in its last financial year due to impairment charges, despite reporting double-digit growth in revenue.
The ingredients and baking products company reported a widened pretax loss for the year ended March 31 at GBP25.2 million from GBP6.2 million the year before, due to a GBP10.5 million impairment charge, coming from the write-down of the plant and equipment of Haydens Bakery and of goodwill in Garrett Ingredients.
There were also exceptional items totalling GBP5.0 million, due to "uncontrolled growth" in the infrastructure and overhead base of Real Good Food's businesses and head office, and unfavourable movements in the macro economy.
Revenue saw a 20% rise to GBP129.8 million from GBP107.7 million, due to the effect of the acquisition of Brighter Foods in April 2017, which contributed GBP16.1 million to revenue.
Since the start of the year, Real Good Food has undertaken significant changes in its business, with the appointment of Hugh Cawley as chief executive officer in January, and the sale of non-core businesses for a total of GBP13.8 million.
The group's central headcount has been reduced to 12 from 47 to date, reducing the central cost base by GBP2.8 million per annum.
"Last year was one which we will look back on with little pride or satisfaction. However, since the start of 2018, we have begun to take many of the remedial actions to turn around performance, continuing these steps beyond the financial year end. Moreover, we can now see the benefits of these actions in terms of having eliminated term bank debt, much reduced costs and a greater focus on our continuing businesses, all of which provide cause for optimism for the future," said Cawley.
"At the moment, underlying trading is in line with our modest expectations for the year, although the Christmas trading period remains a critically important one for Renshaw especially. Overall, the performance of, and prospects for, what is now a smaller and more focused group, have improved considerably," the new CEO added.
Shares in Real Good Food were down 4.7% at 8.10 pence on Friday.
