Real Good Food PLC AGM Trading Statement (7958Z)
September 23 2020 - 2:00AM
UK Regulatory
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RNS Number : 7958Z
Real Good Food PLC
23 September 2020
23 September 2020
Real Good Food plc
("RGF" or "the Group")
AGM Trading Statement
Real Good Food plc (AIM:RGD) provides the following update on
trading for its financial year ending 31 March 2021 to coincide
with its AGM for the year ended 31 March 2020 which will be held at
11.00am today.
Overview
The Group delivered revenues to the end of August of GBP27.0m,
28% lower than the first five months of last year due to the impact
COVID-19. However, sales in August were only 7% lower than the same
month of last year as the impact of the COVID-19 pandemic abated
with the limited lifting of restrictions. Both businesses are now
close to full employment albeit shift patterns have changed to
accommodate social distancing requirements and, as yet, less than
full demand. Within the last couple of weeks, Brighter Foods sales
have seen an improvement with new orders being taken from customers
in the slimming and weight control markets as clubs, which are
classified as "Organized Events", have restarted.
To the end of August, pre-tax losses were GBP3.8m compared to
pre-tax losses of GBP1.9m for the same period last year. It is
worth noting that this period tends to be loss-making as
inventories build, ahead of the peak trading period between
September to December.
Brighter Foods
Sales for the first five months were down 32% compared to last
year, but the business remained profitable and cash generative
demonstrating its resilience and lean and flexible cost base. As
expected, revenues were impacted by the restrictions on social
gatherings and the move to working from home across the country
which affected the entire "food on the go" market. However, the
business has seen a recovery in demand in the last few weeks and
anticipates sales being c.5% ahead of prior year for the second
half of the year and as a result is expecting to be back to near
full capacity by year-end, assuming no new major COVID-19 set-back.
Product innovation remains a key strength, and the business has
launched 17 new products this year and a further 27 new products
have trial and / or launch dates agreed in the near future,
including new products with new customers (48 new products were
launched last year).
Cake Decorations
Sales were 25% lower than last year through to the end of
August, the main impact of the COVID-19 crisis being felt within
the UK Wholesale market and European sales while the UK Retail
market held-up reasonably well. Demand is recovering and the Board
expects that sales for the remainder of the year will be at similar
levels to last year. Progress continues to be made within Renshaw
to become less dependent on the maturing sugar paste and marzipan
markets; new product launches have been made with several major UK
Retailers, including Waitrose and Marks & Spencer. Marks &
Spencer is a new customer for the business, and a new frostings
range has been launched within the Wholesale sector. Both the
Commercial and the New Product Development teams have been
strengthened to accelerate further progress in these areas and to
support improved customer service.
Funding
At 31 August 2020, total net debt was GBP45.8m compared to
GBP44.7m at 31 March 2020. This includes GBP29.6m of investor loans
and GBP13.6m of convertible loan notes which are due for repayment
in May 2021. The Company continues to trade with the support of its
major shareholders and Loan Note holders and new terms are being
discussed.
The value of the first put option by the minority shareholders
of Brighter Foods has been agreed, and the Board and minority
shareholders of Brighter Foods are aligned in their desire to
maximize shareholder value for this business.
Full Year Results
The Group intends to release its Annual Accounts and Report for
the year ended 31 March 2020 during the last week of November 2020,
and by then the Board expects that the extent of the recovery from
the COVID-19 crisis, or any second wave, will be better understood.
At this juncture, both businesses are experiencing an upturn in
demand and anticipate further recovery in the coming months with
the Group trading modestly ahead of the Board's "COVID" budget
expectations.
Mike Holt, Chairman commented:
"Whilst our businesses have been affected by the ongoing
COVID-19 crisis, both Brighter Foods and Cake Decorations are
experiencing recoveries in their respective markets. Despite the
outlook remaining uncertain pro tem, it is encouraging that both
businesses have gained new customers and agreed new product
launches."
All figures noted above in this update are unaudited, unless
otherwise stated.
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 8100
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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