Real Good Food warns earnings could fall short of market views

6th Dec 2016 10:51

(ShareCast News) - Diversified food business Real Good Food said its pre-tax loss widened in the six months to the end of September and warned there was a risk its year-end earnings before interest, tax, depreciation and amortisation could miss market expectations.The company reported a loss before tax of £949,000 compared to £216,000 the year before as administrative expenses rose to £10.2m from £8.8m.Total group sales were up 5% to £49m, driven mostly by the performance of the Premium Bakery division, alongside the successful integration of Chantilly.However, the Food Ingredients business struggled with volatile commodity pricing and adverse currency movements.Executive chairman Pieter Totte said: "We have continued to make good progress on developing our growth strategies in each business division. With the exception of Garrett Ingredients where the dairy and sugar markets have continued to be difficult, exacerbated by recent currency fluctuations, trading performance has been broadly in line with the board's expectations."The company said sales trends in the key third quarter are in line with expectations to date and it expects significant year-on-year growth in EBITDA in the second half.However, it warned of challenges due to the recent depreciation of the pound and increased raw material prices."This, as well as the uncertainty in commodity pricing in particular at Garrett Ingredients, means that, while we expect our year end EBITDA to be ahead of last year, there is a risk that it could fall short of current market estimates."At 1100 GMT, the shares were up 6.7% to 35p.