Real Good Food leaves investors asking for more

The Real Good Food Company left a bad taste in its shareholders' mouths after disappointing with its half year results. Despite boasting improved year-on-year performance with increased volumes in sugar, dairy and bakery ingredients, the company has had to tackle difficulties in the sugar supply chain, where prices remain high and material in short supply. In the six months to 24 June 2011 the company saw its sales rise by 21% to £110.0m (2010: £90.7m), while profitability at the earnings before interest, taxes, depreciation, and amortisation level increased to £2.7m (2010: £0.6m). Executive Chairman, Pieter Totté, said: "Based on the progress we have made over the past six months, I am confident that the group is on course to meet market expectations for the year."Overall borrowings increased to £31.9m (2010: £28.3m) as a result of commodity costs increasing year-on-year, and additional stock levels were required to support growth plans. The company expects that there is likely to be some easing of stock levels following the key fourth quarter trading period. The growth in earnings has significantly improved debt cover and the group remains comfortably within its banking commitments.Implementation of the recovery plan remains broadly on track, although there has been some delay in the factory modernisation programme. The share price was -6.57% to 67.50p at 14:32. NR