RGD.L Regulatory News (RGD)

The Real Good Food Company plc (AIM: RGD)

Results for the 15 months to 31 March 2012

The Real Good Food Company plc ("RGFC" or the "Group"), owns the largest independent non-refining distributor of sugar in Europe (Napier Brown), supplies bakery ingredients (Renshaw and R&W Scott ) and manufactures patisserie and desserts (Haydens Bakery)

HIGHLIGHTS

§ Strong performance driven by focus on brand development and by driving sales growth

§ EBITDA up 62% to £9.1m in 12 months to December 2011 (2010: £5.6m) - performance in 3 Months to 31 March 2012 reflects usual seasonal pattern of trading in quarter one (January to March)

§ Key trading divisions of Napier Brown, Garrett and Renshaw all increased their EBITDA performance year on year

§ Significant improvement in EPS adjusted (fully diluted excluding significant items) at 5.7p for 15 months to 31 March 2012 up 119% on 2.6p for 12 months to 31 December 2010

§ Significant improvement in Net Debt / EBITDA ratio, down from 4.0 at 31 December 2010 to 2.8 at 31 December 2011. (March 2012 reflects normal seasonality profile)

§ Net borrowings of £28.7m at 31 March 2012 are up against 2010 driven primarily by the increased value in the supply chain following the impact mainly of higher sugar costs, but still down on position at 31 March 2011

Pieter Totte, RGFC Executive Chairman, commented:

"In 2011 we delivered on our commitment to return to growth in sales and profitability. We are now embarking on an exciting period designed to transform the scale of the Group over the next three years. This strategy is rooted in robust plans produced by each individual business and we have restructured the Group to support these."

3 July 2012

ENQUIRIES:

Change of Accounting Reference Date

In April 2011 the board announced it was moving its reference date from 31 December to 31 March to better align its financial reporting with its trading seasonality. The October to December period being especially busy generating most of the year's operating profits (approx 58% of EBITDA is generated in 2011 calendar).

Prior to this change the group was faced with preparing annual budgets and market updates for the current year before the key trading period results were known. Whilst we have had a good track record in meeting expectations over the last two to three years the board believe this change will improve the quality and accuracy of reporting in the future.

To help retain transparency where relevant the 2011 calendar year results are presented in this report alongside the 15 Months to 31 March 2012 to aid comparison with the prior year.

Impact of Change

The Jan - March period is the Group's "quietest" trading period with EBITDA typically around the break even level driven by the combination of the lowest sales levels in the year in this quarter with a relatively flat overhead base through the year.

This is evident in the trading comparatives with sales of £305.5m for the 15 Months to 31 March 2012, £56.5m higher than the 12 months ended 31 Dec 2011 (£249.0m) but profitability flat with EBITDA at £9.2m and £9.1m respectively. Given this, the key comparatives and commentary in this report will focus on comparing like with like, with performance for the full year 2011 compared with 2010 (calendar) to ensure that the underlying year on year trading is visible.

CHAIRMAN'S STATEMENT

Overview

I am very pleased with our achievements during 2011: we have delivered significant growth in both sales and EBITDA as well as setting out a clear course for how we intend to build the business over the next three years.

All divisions recorded sales growth and Group EBITDA increased to £9.1m in 2011, an increase of £3.5m on 2010. A significant proportion of this came from Napier Brown as we responded successfully to the market changes but the overall profit performance was supported also by strong results from Renshaw and Garrett Ingredients. Overall profits for the 15 month period to 31 March 2012 were in line with expectations.

Working capital levels generally have been higher during 2011 as compared to 2010 as a result of both supporting our growth plans and reflecting higher commodity prices, particularly in sugar. As at 31 March 2012 working capital of £38.8m was up 8% on 31 March 2011 (£35.9m) but well within management expectations.

Net Debt as at 31 March 2012 was £28.7m (31 March 2011: £29.4m) in line with expectations with Net Debt/EBITDA levels reducing significantly from 4.0 in 2010 to 2.8 at 31 December 2011.

The changes in the sugar market following the Sugar Regime reform period now give Napier Brown a very clear strategic focus. Customers in the EU are looking for alternative sources of sugar to provide competition to the reducing number of big EU beet producers. With our experience in sugar sourcing and our well established routes to market we are well placed to provide this.

In this respect we are delighted that Omnicane, the biggest sugar producer in Mauritius, has decided to take a significant equity stake in RGFC. We have known them for many years and following their investment in the Company we have held positive discussions which lead us to believe that there are many mutual benefits to be realised from greater cooperation.

Omnicane, with its world class model of sugar cane refining combined with electricity co-generation, is a low cost producer of cane sugar. We believe that this model of refining cane sugar in the source country is the right one, not only for Mauritius but also for other cane producers across the world and we intend to work in partnership with Omnicane to develop this. Omnicane can provide the experience and expertise in cane refining and Napier Brown can provide the routes to market, particularly in Europe where customers want and need new supply sources.

Garrett Ingredients had an extremely successful period benefiting from the management focus we have given it and following a similar strategy to Napier Brown in widening its supply sources within dairy products. Its growth prospects come from developing both its product range and its customer base.

Renshaw has benefited from the growing interest in homebaking both in the UK and internationally and this growth has prompted us to review our vision for the brand. There is an exciting opportunity to broaden its focus from its original strength in the specialist crafting sector in the UK to a much wider consumer audience both in the UK and internationally. We see the web as a major facilitator for this.

Just as we have seen benefits separating Garrett Ingredients from Napier Brown and running it as a stand alone business unit, we have started the same process with R&W Scott at Carluke. By separating it from Renshaw and investing in local management we have given its brand and product portfolios renewed focus which should begin to pay dividends during the course of this year.

At Haydens, 2011 saw the opening of the Hopton Distribution site which both created a new business stream but also critically freed up space for us to invest in the bakery. We now have three business streams, ambient, chilled and frozen, and a broadening customer base particularly in foodservice.

We have now implemented the best structure for the Group to facilitate our stated aim of doubling sales over the next three years. Whilst each division is responsible for its growth plans, we now have, in addition to the PLC board, a Group Executive Board where individual Directors have group responsibilities across key areas such as HR, IT, Compliance & Governance, Operations and Marketing where it is clear cross divisional opportunities can be delivered.

Having the right people in the right roles is essential and we have to ensure that each business is resourced fully and effectively. The Group will help achieve this as well as ensuring consistent and high quality employment practices are observed across all our sites.

Our ambitious growth plans present some exciting challenges operationally and will require investment in new capacity. Again, at Group level we can assess the priorities and help smooth implementation of these projects to support the commercial plans.

Finally, we have discovered over the past two years some hidden gems in the brands we own and it is right that the Group provides quality support and direction in managing these assets. The recent new products have given us some indication of the potential for the Renshaw brand and we now have a significantly enhanced vision of its potential.

We believe R&W Scott can also be extended out from its core jam heritage. Meanwhile our revitalisation of the Whitworths brand in sugar has been enthusiastically greeted by the retail trade supporting as it does Napier Brown's overall strategy of providing customers with a differentiated supply option.

Outlook

In 2011 we delivered on our commitment to return to growth in sales and profitability. We are now embarking on an exciting period designed to transform the scale of the Group over the next three years. This strategy is rooted in robust plans produced by each individual business and we have restructured the Group to support these.

While the strategy is not dependent on any single business, we are fortunate to have the support of Omnicane as a major shareholder to work with us on our plans for Napier Brown, our biggest business. We also believe that Omnicane can also help us with our export ambitions.

I would like to take this opportunity to thank colleagues across all the sites in all our businesses for their enthusiasm and support without which we would not have achieved the progress I have reported.

Pieter Totté

Chairman

3 July 2012

DIVISIONAL REVIEW

Napier Brown (Sugar)

From its facility at Normanton, near Leeds, Napier Brown sources sugar from the UK, mainland Europe and worldwide supplying customers in the UK across all market sectors; manufacturing, retail, wholesale and foodservice

¹ Excluding inter-company trading

² Normalised operating profit before interest, significant items and central costs

2011/12 Review

2011 saw a dramatic change in the balance of supply and demand within the EU sugar market reflecting changes in the world market. The EU beet sugar production quotas and reduced import availability due to volatile world prices and currency fluctuations, produced shortages which in the UK were exacerbated by a significant failure of part of the beet crop. The shortage in the supply chain led to sugar prices increasing by approx. 40% at the start of 2011 allowing the market in general to return to more normal margins following the unsustainable levels triggered by regime change which affected profitability in 2008 through to 2010.

Revenue at £143.7m for 2011 was up 32.6% on 2010 with volume growth accounting for 5.2% of this with the remainder being driven by passing on increased sugar costs. EBITDA at £3.7M for 2011 reflects the recovery in margins over 2010. For the 15 month period both revenue and EBITDA reflect the usual lower activity in the January to March period in line with expectations.

The business had to move quickly to supplement its traditional supply routes in order to meet customer demands. This required us to buy sugar from a number of new sources all around the world: seven new countries in all. This exercise was logistically complex leading to an increase in costs and working capital but we were, at the same time, able to benefit from increased selling prices. More importantly the experience gained from handling these sugars and the new relationships we built up with sugar producers will stand us in good stead going forward.

Market prices remained high for the new contract season from October 2011 as supplies continued to be tight. Our contracted volumes increased as more major manufacturing customers decided to increase their number of suppliers and include Napier Brown within their supply portfolio. This combination of higher volumes and higher market prices led to significant revenue increases year on year.

Margins returned to more sustainable levels within the sector though delays in retail price increases and continued competition within the retail arena meant that margins remained depressed in this sector. The need to buy in sugars from a range of new sources increased working capital requirements.

Current Trading

Sales of retail sugars have improved over the past few months as the marketing plans we have been working on have begun to bear fruit. In retail we now have a very distinctive branded offering targeted at all retailers as opposed to relying on one or two price driven private label contracts.

A new marketing department has been set up and a brand manager, a category manager and a new account manager recruited. Brand and PR agencies have been appointed to revitalise the Whitworths brand and bring new ranges to the market. The new 'Whitworths for Baking' range of sugars in innovative, re-sealable pouches has gained good listings in major multiples and early orders are strong.

Meanwhile industrial sales have also been buoyant as we have increased our market share with strategic partners who recognise our ability to supply sugar through new routes thus providing security of supply, best-in-class service and competitive pricing.

Outlook

The business has embarked on a number of new initiatives to develop its strategy. 'Multi-sourcing' will be central to our business proposition and customers are keen for us to continue to offer alternative supply options to the major EU beet sugar producers. In this respect we continue to develop relationships with new supply sources and are planning to invest in an infrastructure which can handle a range of sugars from different sources efficiently and cost effectively.

We have already begun contracting sales for the new season from October and have gained a number of new customers. Meanwhile our new Whitworths branded ranges has enabled us to extend our customer base in retail while we continue to work on further innovations and new products for 2013.

Garrett Ingredients (Sugar & Dairy)

Based at Thornbury, near Bristol, Garrett sources dairy and other specialist food ingredients from across the UK, Eire and continental Europe for supply (along with sugar sourced from Napier Brown) to large, medium and small food manufacturing businesses across the UK.

¹ Excluding inter-company trading

² Normalised operating profit before interest, significant items and central costs

2011/12 Review

Turnover increased during 2011 by 20.3% to £30.8m driven by a 5.3% volume increase in dairy ingredients and higher commodity prices. Much of the focus during the year was ensuring product availability by increasing the supplier base in dairy powders, butters and cheese from the UK, Ireland and continental Europe. In addition two new distributor partnerships in the UK were signed with Friesland Campina for sweet condensed milk and Cargill for dextrose.

A high proportion of the division's sugar sales are 'spot' and sales prices increased during the early part of the year as sugar supplies were short due to the UK crop difficulties and, as with the Napier experience, this also allowed the business to rebuild sugar margins to "normal" levels following the upheavals during regime change. Garretts had the same experience in sugar as Napier with margins being restored to more sustainable levels as seen in the EBITDA performance for 2011 of £2.7m. The 15 month period captures the usually less profitable January to March period.

Current Trading

Garrett's historic strength with small food manufacturers is now being complemented with a growing customer base amongst larger manufacturers where dairy and sugar may not be a core ingredient and where Garrett can offer excellent service and security of supply. Dairy markets have been relatively quiet recently while sugar sales have continued to be strong.

The Sunshine Ice Cream mix brand has been relaunched for summer 2012 while work is underway with a number of customers to produce bespoke added value blends utilising the mixing plant at the R&W Scott site in Carluke.

The sales operation is being restructured following the appointment of Paul Carlisle as Sales Director and the setting up of a dedicated telesales operation at the head office in Thornbury. This is being supported by investment in IT systems and associated training.

Outlook

With the UK Dairy supply base consolidating, plans are in place to increase sourcing from further afield and open up trading channels with manufacturers and supply partners from continental Europe and beyond. An integral part of the three year plan is to increase the supply partner base, either as simply a customer for the supplier or as a dedicated distributor for the manufacturer's ingredients to the UK and Irish food manufacturing market.

Sales growth will come from both increasing the product range and the breadth of the customer base. Negotiations are underway on several potential new distributorships and supply agreements focusing on areas such as whey powder, where the number of UK manufacturers has decreased leading to reduced availability.

Renshaw (Bakery Ingredients)

Operating out of its Liverpool facility Renshaw is a leading manufacturer of high quality food ingredients, primarily to the baking sector both in the UK and for export with a strong reputation for quality, consistency and innovation.

¹ Excluding inter-company trading

² Normalised operating profit before interest, significant items and central costs.

2011/12 Review

2011 has seen another successful year with revenue growing by 12.5% to £38.6m (2010 £34.3m) driven by both domestic and international sales with EBITDA at £5.9m also up on 2010 (9.7%). The reported period (15 months to March 2012) appears to buck this trend, however, Renshaw is an exceptionally seasonal business with the bulk of its trading profits generated in the last few months of the calendar year. Quarter one 2012 has generated a small loss at EBITDA level, in line with our expectations, seasonality and prior years.

In the UK the Renshaw brand extended its presence in both the retail and craft sectors while export sales continued to show growth both in the core business in the USA as well as other markets such as Scandinavia. This was recognised when The Liverpool Daily Post awarded Renshaw the title 'Regional Exporter of the Year' for 2011.

Retailers and the media are maintaining a strong focus on both homebaking and cake decorating. Renshaw has sought to capitalise on this with a range of new innovative products that have begun to gain new distribution in both mainstream and specialist craft retailers.

Sales growth led to the Liverpool manufacturing site producing record tonnage during the year, including 76 new retail products. This was achieved through a combination of 24 hour working and a rationalisation of shift patterns to improve continuity and capacity. Investment in new extruding and packing equipment was also required to meet the demand.

Current Trading

Sales have remained strong both domestically and internationally and the business has invested in people to manage this growth across all the sales channels.

The Commercial team has been restructured to focus on the three main channels of Industrial, Consumer and Export while plans are in place to develop a new e-commerce channel. The Development team has been upgraded with new appointments including a focus on packaging. In addition a new dedicated Operations Director for the Liverpool site has recently joined the business.

Outlook

It is clear that the homebaking trends which are being experienced in the UK are being replicated in many other countries and research has begun into identifying the areas of greatest potential. Our vision is to develop the Renshaw brand globally as an expert in cake decorating and we see the creation of a branded e-commerce sales channel as central to this.

R&W Scott (Bakery Ingredients)

R&W Scott at its Carluke facility south-east of Glasgow produces chocolate coatings and sauces, jams and dry powder blends for the industrial, retail, wholesale and foodservice markets.

¹ Excluding inter-company trading

² Normalised operating profit before interest, significant items and central costs

2011/12 Review

2011 proved to be a tough year for the business which incurred significant material cost increases which were not being recovered in sales price increases until late in the year. As a consequence of the delay in passing on costs and due to production inefficiences on a changing sales mix EBITDA for 2011 fell to a loss of (£0.8M) over the previous year with the 15 month period presenting a similar picture whilst underlying volumes were static against the prior year.

In order to address this the Carluke site was established as a separate trading division from Renshaw during the latter half of 2011, under its old trading name R&W Scott, in order to bring more commercial focus to its key product areas of chocolate coatings, sauces, jams and dry powder blends.

2011 saw overall volumes at the site increase to 7,400 tonnes helped by the re-siting of the dry powder mix from Napier Brown in Normanton. To support this volume growth, further capital investment was made in the site in the areas of malted filling capacity, refining capability and retail packing as well as upgrades from an environmental and health and safety perspective.

Current trading

I am pleased to report that the current year has started strongly and has returned to profitability. Delivered margin (gross profit after distribution before overheads) aspirations for 2012/13 are to move from the 12% achieved in 2011/12 to above 20%. Run rate in the first quarter is in line with plan due to improved pricing, increased output of higher value added lines and focus on improvement initiatives. Business development plans are in place to continue to drive margin improvement and return EBITDA back to positive.

Outlook

The vision for R&W Scott is to transform the Carluke site from being a manufacturer of largely commodity products to an added value, innovative and commercial business utilising the site's considerable brand heritage, skills and capabilities.

A new site based management team has been established to bring focus to the business across all sales channels; industrial, foodservice and retail. Using our experience to create new recipes, made in innovative ways and that have lifestyle appeal, is the key to brand development, improved product offerings and to delivering growth. The first example of this is the revitalisation of the R&W Scott brand with an exciting new range of naturally sweet retail jams due to appear in supermarkets later this year.

The business plans to increase turnover to £25m within 3 years and the site has both the capacity and capability to deliver this. Product development in tune with the needs of the consumer today will drive the business to be a brand led enterprise supported by investment in facilities, plant and new product support.

Haydens Bakeries (Bakery Division)

From its site in Devizes, Wiltshire Haydens Bakeries produces an extensive range of high added value, hand finished, ambient, chilled and frozen patisserie and dessert products to retail and foodservice customers. Through its Hopton Distribution subsidiary, it also consolidates distribution of bakery products from other manufacturers to Waitrose.

¹ Including inter-company trading

² Normalised operating profit before interest, significant items and central costs

2011/12 Review

As reported previously Haydens had a difficult year in 2011 on two fronts. Significant material cost increases which were not reflected in sales price increases until quarter four and the factory development started later than planned preventing management from delivering the cost reduction opportunities from production efficiencies and improved material usage.

Revenue growth of 3.7% in 2011 was not sufficient to offset the combined impact of these pressure points resulting in EBITDA dropping to a loss (£0.4m) in 2011 with the trend largely the same for the 15 month period.

Commercially the business continued to thrive with over thirty new products launched focusing on the bakery's core processes. These new products included premium dessert products for the 'Heston' brand in Waitrose through to individually packaged Danish products and were developed under the supervision of Executive Chef, Ross Sneddon who has recently been awarded the honour of Master Chef-Patisserie. New formats of Haydens' high quality products are part of the division's strategy to broaden its exposure to new customer channels such as impulse, convenience and foodservice.

The new Distribution Centre for Waitrose opened in April 2011 and this has enabled the 3 year bakery modernisation programme to begin with blast chilling and freezing capability planned to be in place by mid-2012. These changes are critical to delivering production cost and material usage efficiencies as well as reaching new sales channels. Meanwhile there has also been investment in tart and pie capacity required to meet growing demand.

Current Trading

There continues to be strong demand for the Company's added value products, with over 15 new patisserie and dessert launches in the late spring of this year. Additionally, new food service products were launched in line with Hayden's strategy to develop the full potential in this sector.

In the immediate future, the focus is on increasing efficiencies and reducing costs through the implementation of the factory development programme, delayed from last year. This is now live and stage 1 benefits should start to materialise from the 3rd quarter of this year.

Outlook

The division has a clear strategic plan to focus its new product development in its areas of expertise and broaden its customer base by exploiting its quality credentials across a range of trade channels. The capability to utilise ambient, chilled and frozen supply chains is central to this.

The factory development programme is being delivered by a new highly motivated Operations team, led by newly appointed John Larsen. The team is committed to delivering significant return on this investment within the current financial year. This plan, coupled with aspirations for strong sales growth in the second half of the year, is providing the management with reason for optimism.

FINANCE DIRECTOR'S REPORT

Accounting reference date

As commented on at the start of this report, the change in the accounting reference date will improve the Group's budgeting and forecasting routines, and consequently in providing stakeholders with commentary and trading updates. At this time, however, we "tag on" our lowest trading quarter to our normal twelve month period creating some "noise" around understanding the underlying performance and trend. In order to overcome this, emphasis in the commentary is placed on comparatives with like for like "calendar" performance for 2011 versus 2010. Additional commentary on the 31 March 2012 position is included where appropriate.

Revenue

Group revenue from continuing operations for the 15 months to 31 March 2012 was £305.5m 2011 (Jan to Dec) at £249.0m, on a like for like basis was approx 25% up (£48.9M) on 2010 at £200.1m. Of this £48.9m year on year increase, approximately 80% (£39.4m) is from the Napier & Garretts businesses with £30.2m of this increase "value driven", reflecting the increased commodity costs, primarily sugar, and passed on in sales prices to customers.

Overall on a like-for-like basis the Group grew in volume terms by 5.3% in 2011.

Margins

Delivered Margin for the 15 month period was £26.6m resulting in EBITDA of £9.2m with 2011 calendar year at £22.9m up 44.6% on 2010 (£15.8m). This increase is a result, primarily, of trading margins in sugar returning to more normal sustainable levels following the upheavals in the Sugar Regime that adversely affected profitability from 2008 through 2010.

Profit before Tax and Interest

Overall profits for the 15 month period and 2011 calendar year were in line with expectations driven by the recovery in Sugar in Napier and Garretts.

Financing Costs

Financing costs for the 15 months at £1.9M were in line with the 2011 "run rate" of £1.5m (2010 £1.4m).

Significant Items

During the 15 months the Group incurred one-off costs of £0.55m due mostly to the reorganisation of the Haydens operation, £0.43m, a continuation of the modernisation programme started in 2010. £0.12m was incurred in the liquidation and winding up of dormant subsidiaries and the hive down of Haydens trading from the Plc entity into its own limited company. The tidying up of this structure will reduce administration and increase transparency for stakeholders.

Cash Flow and Debt

Working Capital levels have increased (24% as at 31 December 2011) over 2010 levels reflecting primarily increased material costs which are not expected to ease in the short term. The group has also maintained higher stock levels especially in sugar following the problems experienced in the supply chain last year.

These factors have pushed debt levels up, with Net Debt up 14% at 31 December 2011 compared to 31 December 2010, although this is in line with expectations and well within our funding facilities.

Net Debt (after Cash) as at 31 March 2012 was £28.7m (31 March 2011 £29.4m) reflecting the normal seasonality through the year.

However, underlying Debt levels as compared to EBITDA (Net Debt to EBITDA) have reduced significantly from 4.0 in 2010 to 2.8 at Dec 2011. March 2012 has moved up since Dec 2011 but this is in line with expectations and follows our normal seasonality pattern.

Pensions

Two subsidiaries, Napier Brown Foods Limited and Renshawnapier Limited, operate a defined benefit pension scheme which is closed to new members. The IAS 19 valuation of the scheme at 31 March 2012 identified a £1.1m deficit, a deterioration of £1.1m since December 2010. The scheme's assets have largely retained their value since 2010 with the deficit mainly driven by the fall in discount rates at the present time increasing the present value of future benefits. The Group is proactive with the trustees in managing the scheme, not losing sight of the fact key market drivers are weak and presenting a negative view at this time. During the period the Group contributed £177k (2010: £117k) to the scheme.

Key Performance Indicators

The Board of Directors monitors a range of financial and non-financial key performance indicators, reported on a periodic basis, to measure the Group's performance over time. The key performance indicators are set out below:

The 2011 Calendar as compared with 2010 breaks out the underlying trends with improvement across all areas, with the 15 month period to 31 March 2012 capturing the seasonality of the January to March quarter which dilutes the picture.

Mike McDonough

Group Finance Director

3 July 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

15 months ended 31 March 2012

Consolidated STATEMENT OF Changes in equity

15 months ended 31 March 2012

consolidated STATEMENT OF FINANCIAL POSITION

15 months ended 31 March 2012

These financial statements were approved by the Board of Directors and authorised for issue on 3 July 2012. They were signed on its behalf by:

P W Totté M J McDonough

Chairman Director

CONSOLIDATED cash flow statement

15 months ended 31 March 2012

NOTES TO THE FINANCIAL STATEMENTS

15 months ended 31 March 2012

1. presentation of financial statements

General information

The Real Good Food Company plc is a public limited company incorporated in England and Wales under the Companies Act (registered number 4666282). The Company is domiciled in England and Wales and its registered address is 229 Crown Street, Liverpool, Merseyside, L8 7RF. The Company's shares are traded on the Alternative Investment Market (AIM).

The principal activities of the Group are the sourcing, manufacture and distribution of food to the retail and industrial sectors.

Basis of preparation

These consolidated financial statements are presented on the basis of International Financial Reporting Standards (IFRS) as adopted by the European Union and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and have been prepared in accordance with AIM rules and the Companies Act 2006, as applicable to companies reporting under IFRS.

These consolidated financial statements have been prepared in accordance with Group accounting policies and under the historical cost convention, except where modified by the revaluation of certain financial instruments and commodities.

New IFRS standards and interpretations adopted

The following IFRS standards, amendments and interpretations are not yet effective and have not been adopted early by the group.

The adoption of these standards, amendments and interpretations is not expected to have a material impact on the Group's profit for the period or equity. The adoptions may affect disclosures in the Group's financial statements.

2. SEGMENT REPORTING

Business segments

The group has historically traded with its operating segments being Sugar, Bakery Ingredients and Bakery and the Group's management and reporting structure was traditionally set out along those lines. However in 2011 with the separating of the R&W Scott business from Renshaw we have now migrated to a structure that reflects the management teams in place and also ensures all aspects of trading activity has the specific focus it needs in order to achieve our growth plans

Sales between segments are charged at prevailing market rates.

2. SEGMENT REPORTING (continued)

(1) Unallocated

Relates primarily to the Head Office and non current asset additions, depreciation and amortisation which cannot be meaningfully allocated to individual operating divisions.

Geographical segments

The Group earns revenue from countries outside the United Kingdom, but as these only represent 3.0% of the total revenue of the Group, segmental reporting of a geographical nature is not considered relevant

2. SEGMENT REPORTING (continued)

 Sales beween segments are charged at prevailing market rates.

2. SEGMENT REPORTING (continued)

Unallocated

 Relates primarily to the Head Office and non current asset additions, depreciation and amortisation which cannot be meaningfully allocated to individual operating divisions.

Geographical segments

The Group earns revenue from countries outside the United Kingdom, but as these only represent 3.1% of the total revenue of the Group, segmental reporting of a geographical nature is not considered relevant.

3. SIGNIFICANT ITEMS

During the year the Group incurred a number of significant costs as detailed above. The management restructuring costs reflect a number of fundamental reorganisations within our operating divisions during the year. The Group restructuring cost relate to liquidation of dormant subsidiaries necessary to simplify the Group structure.

4. dIRECTORS' REMUNERATION

The emoluments of the Directors for the period were as follows:

* Short term Employee Benefits (Salaries and fees) include both fees received as an officer of the Company and separate consultancy fees.

Key management personnel are considered to be the Company Directors

4. dIRECTORS' REMUNERATION (continued)

Directors' interests in share options