RGD.L Regulatory News (RGD)

24 Jan 2006 07:01

Real Good Food Company Plc (The)24 January 2006 Date: 24 January 2006On behalf of: Real Good Food Company plc ("the Company" or " RGFC")Embargoed to: 0700hrs Real Good Food Company plc Trading Update for the year to 31st December 2005 • Integration RGFC/Napier Brown in line with plans• PBT approximately £7million for full year 2005• Business well positioned for 2006 Real Good Food Company plc, the food manufacturing group in ambient, chilled andfrozen products, is providing the following trading update prior to entering itsclose period. Against a very competitive background in all our sectors, trading performancehas been marginally below market expectations. Five Star Fish and Napier BrownFoods continue to perform well, the latter against the background of a verycompetitive sugar market. The performances of both the Renshaw ingredientsbusiness and Hayden's Bakeries have enjoyed record results under our ownership,exceeding their performances in the previous year, though below their targetsfor 2005. Five Star Fish had another outstanding year with increased sales and animprovement in gross margins thanks to excellent factory efficiencies and theachievement of some price increases. The division has now achieved the earn-outtargets set at the time of acquisition. This was achieved against thebackground of a flat foodservice market and raw material inflation. Hayden's and Seriously Scrumptious, now operating together as the BakeryDivision, have achieved much improved performance when compared to 2004.However, delayed launches of new products to existing customers and delays ofnew customers coming on stream has hindered progress. The Board is confidentthat the steps it has taken to strengthen the commercial team and improve labourcosts and controls will result in improved performance during the course of2006. Performance at the Renshaw ingredients business was broadly in line withexpectations despite considerable restructuring activity. Renshaw has nowsuccessfully integrated the Sefcol business and the caramel production linestransferred from the Group's former plant in Runcorn. As previously announced,the Board took the decision to close the loss-making nut processing arm ofSefcol, to be effective at the end of January 2006. Additionally, themanagement team in Renshaw has been strengthened by two senior managerialappointments. Napier Brown Foods, the sugar and dry ingredients division, achieved recordsales, with volumes to retail customers being particularly strong, following theintegration of the James Budgett Sugars business into the division in spring2005. During the course of the year, the division has also made good progresstowards improving margins, despite increased volatility in the sugar market. The consolidation of the Head office and central functions of RGFC and NapierBrown Foods plc has now been completed, although costs associated with thisrestructuring were marginally higher than anticipated. I would like to welcomePat Ridgwell and Chris Thomas to the Board and thank Campbell Mitchell andRichard Gradowski-Smith, who have now left the Board, for their contributionsover the past two years. In light of the above factors, we now expect the profit before exceptional itemsfor the Group for 2005 to be approximately £7 million. At the year end the Group had a positive cash balance of over £6 million, withdebt some £11 million within the Group's available facilities. We believe all business units are now well structured to be able to competeeffectively in what is a competitive market and we are optimistic for asuccessful 2006. Enquiries to: John Gibson/Lee CamfieldReal Good Food Company Tel: 020 7234 0570 Emma Kane / Duncan McCormickRedleaf Communications Ltd Tel: 020 7955 1410(PR Adviser to the Company) This information is provided by RNS The company news service from the London Stock Exchange