Real Good Food PLC Trading Update (4582L)
January 13 2021 - 1:00AM
UK Regulatory
TIDMRGD
RNS Number : 4582L
Real Good Food PLC
13 January 2021
13 January 2021
Real Good Food plc
("RGF" or "the Group")
Trading Update
Real Good Food Plc (AIM:RGD), the diversified food business,
announces a trading update for its current financial year ending 31
March 2021 to date, ahead of its General Meeting and Shareholders'
Q&A being held later today.
As reported on 16 December, at the time of the publication of
the notice of General Meeting and Trading Update, the Group's two
businesses are getting stronger and more resilient after a tough
first half. The near-term outlook continues to hold challenges due
to covid-19 but improved Q3 trading demonstrated encouraging
progress and provides confidence for the future.
Our plan for the current financial year was to leverage the
capacity investment made during FY20 in Brighter Foods, to
accelerate operational changes made within Renshaw and to generate
revenue growth from new products and better customer service
delivery. It is frustrating therefore that the covid-19 pandemic
and Brexit uncertainties have constrained these objectives, albeit
the Board believes the Group did well in the first half of the year
to hold revenues to within 26% of last year under these
circumstances (H1 2019: GBP32.4m). However, given the operational
gearing of the business, particularly within Renshaw, the reduction
in revenues meant that there was a greater drop in profitability,
such that the Group operated at around break-even at the adjusted
EBITDA level for the first half (H1 2019: EBITDA of GBP2.8m).
Following the easing of some covid-19 restrictions,
encouragingly Q3 (September - December 2020) revenues and EBITDA
were in-line with last year's third quarter at GBP19.4 million and
GBP1.7 million, respectively as well as being in line with Board
expectations.
Renshaw's performance improvement initiatives, which had
commenced in FY20, have continued to focus on developing strategic
partnerships with customers and distributors and driving
fundamental operational improvements. Benefits from these are
beginning to come through. The business has also continued to
develop and innovate new products, most notably with recent product
launches in Tesco, Waitrose, and Marks & Spencer.
Brighter Foods, which ended FY20 with very significant revenue
growth (25.0% CAGR since acquisition), was impacted by the sectors
it sells into being substantially closed during the first lockdown.
However, by working closely with its customers to identify new
potential outlets, the management team was successful in recovering
revenues in Q2 and Q3. By flexing its cost base, the business has
remained profitable throughout the year.
Once covid-19 restrictions are lifted, Brighter Foods is
well-placed to recommence the growth reported in FY20, capitalising
on its additional capacity, market opportunities and new product
innovation capabilities, whilst Renshaw should benefit more fully
from its restructuring and greater focus on product innovation and
customer service.
As announced on 30 December 2020, Real Good Food confirms that
it will be releasing its half year results for the six months ended
30 September 2020 by Friday 29 January 2021, when we look forward
to updating shareholders further.
Mike Holt, Executive Chairman commented:
"It is pleasing that both businesses are getting stronger and
more resilient despite the current economic challenges and that the
Group's Q3 performance was much improved on the first half and in
line with last year and Board expectations. The Board remains
committed to reducing the Group's debt burden and reviewing all
initiatives to improve its capital structure."
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
Enquiries:
Real Good Food plc Tel: 0151 541 3790
Mike Holt, Chairman
Maribeth Keeling, Group Finance Director
finnCap Limited (Nomad and Broker) Tel: 020 7220 0500
Carl Holmes / James Thompson (Corporate
Finance)
MHP Communications (Financial PR) Tel: 020 3128 8793
Reg Hoare / Katie Hunt rgf@mhpc.com
About Real Good Food
Real Good Food plc is a food manufacturing business serving several
market sectors including retail (own label and private label),
manufacturing and export. The Company has two businesses, Cake
Decoration (Renshaw and Rainbow Dust Colours) and Food Ingredients
(Brighter Foods), with leading brands in their chosen markets.
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END
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