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Food ingredients division helps Real Good Food to narrow losses
29th Nov 2019 07:38
(Sharecast News) - Real Good Food posted a narrowing of its interim losses on Friday as a "stellar" performance from its food ingredients business and cost savings helped to offset a more challenging period for the cake decorations segment.
In the six months to the end of September, pre-tax losses narrowed to £2.5m from £9.1m in the first half of last year, as revenue rose 7% to £32.4m. Underlying adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 201% to £2.8m.
The food ingredients unit - Bright Foods - saw a 77% rise in underlying adjusted EBITDA to £2.5m. The company said this reflected "significant growth" with new and existing customers and the benefit of recent investment in additional capacity. This helped to offset weakness in Renshaw, the cake decoration division, which saw underlying adjusted EBITDA fall to £0.6m from £1.3m due to "short term challenges" in its retail market and operational issues.
Non-executive chairman Mike Holt said: "The group has made significant progress over the past six months, especially within Food Ingredients where capacity has doubled and is almost fully utilised with strong order intake and commitments from both new and existing customers.
"Whilst Cake Decoration has had a difficult period, its new chief executive has launched a major improvement programme focussed on developing strategic partnerships with customers and distributors and driving fundamental operational improvements, the benefits of which are beginning to come through."
At 1305 GMT, the shares were up 4.2% at 6.90p.
In the six months to the end of September, pre-tax losses narrowed to £2.5m from £9.1m in the first half of last year, as revenue rose 7% to £32.4m. Underlying adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 201% to £2.8m.
The food ingredients unit - Bright Foods - saw a 77% rise in underlying adjusted EBITDA to £2.5m. The company said this reflected "significant growth" with new and existing customers and the benefit of recent investment in additional capacity. This helped to offset weakness in Renshaw, the cake decoration division, which saw underlying adjusted EBITDA fall to £0.6m from £1.3m due to "short term challenges" in its retail market and operational issues.
Non-executive chairman Mike Holt said: "The group has made significant progress over the past six months, especially within Food Ingredients where capacity has doubled and is almost fully utilised with strong order intake and commitments from both new and existing customers.
"Whilst Cake Decoration has had a difficult period, its new chief executive has launched a major improvement programme focussed on developing strategic partnerships with customers and distributors and driving fundamental operational improvements, the benefits of which are beginning to come through."
At 1305 GMT, the shares were up 4.2% at 6.90p.