Soggy bottom line for Real Good Food as costs and sugar prices weigh

3rd Dec 2013 09:23

First-half profits plummeted at ingredients specialist Real Good Food as it suffered from a dramatic drop in EU sugar prices and continued its reorganisation.Higher costs meant that profits plunged 90% to £0.1m on sales down 5.6% to £130.1m in the six months to September 30th, meaning a soggy bottom line was down 71% to 0.4p. Executive Chairman Pieter Totte added that the sugar distribution business Napier Brown faced a "significant challenge" over the coming months as it brought its buying book in line with the dramatic correction in EU sugar market prices, but that measures had already been put in place to counter this.However, he pointed out that Napier Brown's sales volumes in both the industrial and retail markets increased significantly from the start of the new contract season in October 2013 and he anticipated the relaunched Whitworths sugar brand achieving a consumer sales value of more than £100m over the next 12 months.Elsewhere within the group, branding and sales initiatives at baking ingredients business Renshaw, chocolate and jams maker R&W Scott and patisserie arm Haydens were delivering in line with expectations and management anticipated that in the next financial year some 25% of group sales will be represented by branded product. "This demonstrates how our business model is evolving," said Totte.Shares in RGD were down 14% to 59p at 09:30 on Tuesday.OH