1 Aug 2017 07:00
For immediate release: 1st August 2017
Real Good Food plc
("the Company" or "Real Good Food")
Company Update
The Company announces that during the audit process of its full year accounts for the year ended 31 March 2017, two substantial anticipated claims regarding its sugar purchase arrangements have not yet materialised with the effect that it will not meet its previously forecasted profit figures.
In addition, the Board has concluded that certain development costs, which had previously been capitalised in FY 2017, should more appropriately have been expensed. The Board expects the total of these adjustments and further accrued expenses will have the effect of reducing the anticipated EBITDA to approximately £2.0 million for FY 2017. This number is still subject to final audit.
Following the recent injection of expansion capital announced on 29 June 2017, the Board has undertaken a full re-forecasting exercise for the year ending 31 March 2018. The investment projects funded by the expansion capital are now proceeding to plan and being well received by customers.
As the injection of expansion capital was agreed about three months later than anticipated this has resulted in some delay in the implementation of these projects, particularly at Renshaw. This, combined with slightly softer trading conditions in Q1, has adversely affected the Board's expectations for the financial year ending 31 March 2018 with the result that EBITDA is now anticipated to be approximately £2.3 million lower than previously expected. However, the anticipated benefits of these projects remain robust and are expected to be fully realised in the financial year ending 31 March 2019.
The Board further announces that it has realised that certain payments made to certain Directors for consultancy services have not been separately disclosed in the related party transaction notes to its previously published audited Annual Report & Accounts for FY 2014, FY 2015 and FY 2016. These are believed to amount to £250,000 to Pieter Totté and £25,000 to Peter Salter in FY 2014, £358,000 and £20,000 respectively in FY 2015 and £1.21 million to Pieter Totté in FY 2016.
These costs were fully accounted for in the relevant accounting periods so have no impact on the reported profit before tax for these three years.
The Company now expects to announce Final Results for the year ended 31 March 2017 at the end of August 2017.
-Ends-
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
ENQUIRIES:
Real Good Food plc
Pieter Totté, Executive Chairman Tel: 020 38573900
David Newman, Finance Director
Andrew Brown, Marketing Director
finnCap Ltd (Nomad and Broker)
Matt Goode Tel: 020 7220 0500
Carl Holmes
Daniel Stewart and Company Plc (Joint Broker)
David Lawman Tel: 020 7776 6550
Belvedere Communications (PR)
John West Tel: 020 3567 0510
Kim van Beck
About Real Good Food plc
Real Good Food plc is a diversified food business serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Group focuses on three main markets: Cake Decoration (Renshaw, Rainbow Dust Colours), Food Ingredients (Brighter Foods, Garrett Ingredients and R&W Scott) and Premium Bakery (Haydens and Chantilly Patisserie).