RNS Number:3131K
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 than
originally expected but the Group continues to trade profitability and generate
positive cash flow from operations. Accordingly, for the year to 31 December
2007 normalised profits before tax are expected to be not less than £6.0m (£4.0m
on continuing operations), equivalent to post tax earnings per share of
approximately 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 a
comprehensive review of each of the divisions. The Executive team will be
strengthened at the start of January 2008 by the appointment of Tony Sharpe,
formerly Managing Director of G & J Greenall, to lead the Bakery ingredients
division.
In the past year, action has been taken to address the significant inflation in
some raw material prices by, where possible, passing rising costs on to
customers and implementing a programme to provide more effective purchasing and
inventory management. These processes will continue to accrue benefits into the
next financial year.
The proceeds from the sale of Five Star Fish in June, together with positive
operational cash flow, has enabled the Group to significantly reduce debt
levels, leaving resultant current year debt/EBITDA levels at less than 2.6
times.
The EU sugar market continues to make slow progress with regard to voluntarily
reducing production levels; however the regulatory framework in place for 2008/9
will bring about further market restructuring. The Board continues to believe
that thereafter significant opportunities will exist for Napier Brown to
leverage its strong market position with regard to global access to the EU
marketplace leading to an improvement in margin.
Despite the economic outlook for 2008 being somewhat uncertain, and the widely
publicised view that the UK consumer will become more prudent in relation to
household expenditure, the Board is expecting continuing operations
profitability for the next financial year to be in line with the 2007
performance.
19th December 2007
Enquiries:
Real Good Food plc Tel: 020 7335 2500
Stephen Heslop, Chief Executive
Lee Camfield, Finance Director
College Hill Tel: 020 7457 2020
Anthony Parker
Gareth David
This information is provided by RNS
The company news service from the London Stock Exchange
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