16th Aug 2019 09:27
(Alliance News) - Cake decoration and food ingredients business Real Good Food PLC on Friday said impairment charges related to a business turnaround programme led to a sharply widened annual loss.
The company recorded a pretax loss of GBP26.1 million for the year to March 31, deepened from GBP9.1 million in the comparative year-ago period.
Impairment charges totalled GBP18.7 million versus none a year ago. In financial 2019, the company sold Garrett Ingredients, Haydens Bakery, R&W Scott and Chantilly Patisserie as part of a turnaround plan for GBP18 million in total, used in debt reduction and working capital.
Revenue from continuing businesses fell slightly to GBP61.6 million from GBP63.8 million. The company's Food Ingredients unit saw a reduction of GBP900,000 in revenue due to operational issues arising from capacity expansion. Cake Decoration's sales were down by GBP1.2 million due to loss of a significant customer
"In the new financial year to date, current trading from the two remaining, robust and profitable businesses is in line with our modest expectations for the year. The group remains focused on continuing to improve its results and on reducing net debt, as well as continuing to support the business's strategy and thereby to increase shareholder value and returns," said Chief Executive Hugh Cawley.
Real Good Food's net debt at period end stood at GBP35.7 million versus GBP37.8 million a year ago, being predominantly shareholder loans. On Monday, the company negotiated an extended repayment dates for loans from three major shareholders.
Shares in the company were down 10% at 6.50 pence each in London on Friday morning.
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