31 Jan 2018 10:30
Real Good Food plc
("Real Good Food", "the Company" or "the Group")
Trading Statement
Real Good Food Plc (AIM:RGD) today provides the following update on trading.
Sales during the early part of the Christmas trading quarter were largely satisfactory. Performance in the last few weeks of the year however was materially below the Company's expectations, largely owing to disappointing performance in UK grocery retail and de-stocking in overseas markets.
In addition, the Board is currently undertaking a review of the various balance sheets of the Group companies in order to ensure that their accounting treatments are consistent across the Group and accord with good practice.
As a result of this review and of a reforecast exercise within all the operating businesses, allied to the poorer than expected trading late in 2017 and early in 2018, the Company now expects the outturn for the year to be an EBITDA loss of up to £3.5 million.
Looking more widely at the prospects for the Company, there are clear signs that the considerable investment made throughout the Group in the past eighteen months is beginning to yield benefits. A turnaround plan has been formulated and is now in the process of being implemented by the new management team to reverse the negative performance trend and to begin to deliver the sort of returns that investors should more reasonably expect over the medium term.
In addition to this, the Company continues to improve its corporate governance and internal reporting and accounting processes and procedures. The Company has also appointed BDO LLP as its new auditors.
The Company's major shareholders, who are represented on the Board, remain fully committed and supportive of the turnaround plan and its implementation. The major shareholders have again stated their willingness, for instance, to bridge any short-term funding needs should a solution for the identified funding requirement not be in place as anticipated by the end of the first quarter. The majority of the Group's debt already sits with the major shareholders; save for the asset-backed funding, borrowings from the Group's primary lender now comprise just £1.75m of amortising term loan.
The Board believes that each of the Company's three divisions hold good market positions and have valuable prospects and individual worth.
-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
Hugh Cawley, Executive Director Tel: 020 38573900
Harveen Rai, Finance Director
Andrew Brown, Marketing Director
finnCap Ltd (Nomad and Broker)
Matt Goode Tel: 020 7220 0500
Carl Holmes
Belvedere Communications (PR)
John West Tel: 020 3567 0510
Kim van Beeck
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).