RGD.L Regulatory News (RGD)

19 Dec 2007 15:29

Real Good Food Company Plc (The)19 December 2007 Real Good Food Group plc Pre-close trading update Trading conditions, in all divisions, have proved to be more challenging thanoriginally expected but the Group continues to trade profitability and generatepositive cash flow from operations. Accordingly, for the year to 31 December2007 normalised profits before tax are expected to be not less than £6.0m (£4.0mon continuing operations), equivalent to post tax earnings per share ofapproximately 6.5 pence. Stephen Heslop was appointed as the Group's new Managing Director in September,and as a consequence of the more demanding market conditions, is leading acomprehensive review of each of the divisions. The Executive team will bestrengthened at the start of January 2008 by the appointment of Tony Sharpe,formerly Managing Director of G & J Greenall, to lead the Bakery ingredientsdivision. In the past year, action has been taken to address the significant inflation insome raw material prices by, where possible, passing rising costs on tocustomers and implementing a programme to provide more effective purchasing andinventory management. These processes will continue to accrue benefits into thenext financial year. The proceeds from the sale of Five Star Fish in June, together with positiveoperational cash flow, has enabled the Group to significantly reduce debtlevels, leaving resultant current year debt/EBITDA levels at less than 2.6times. The EU sugar market continues to make slow progress with regard to voluntarilyreducing production levels; however the regulatory framework in place for 2008/9will bring about further market restructuring. The Board continues to believethat thereafter significant opportunities will exist for Napier Brown toleverage its strong market position with regard to global access to the EUmarketplace leading to an improvement in margin. Despite the economic outlook for 2008 being somewhat uncertain, and the widelypublicised view that the UK consumer will become more prudent in relation tohousehold expenditure, the Board is expecting continuing operationsprofitability for the next financial year to be in line with the 2007performance. 19th December 2007 Enquiries: Real Good Food plc Tel: 020 7335 2500Stephen Heslop, Chief ExecutiveLee Camfield, Finance DirectorCollege Hill Tel: 020 7457 2020Anthony ParkerGareth David This information is provided by RNS The company news service from the London Stock Exchange