Real Good Food plc, (AIM: RGD) the diversified food business, today announces its final results for the year ended 31 March 2019.
- Revenue from continuing businesses decreased by 3.4% from £63.8 million to £61.6 million.
- Adjusted EBITDA of £1.9m (see note 3) compared to a loss of £0.3m in the prior year, despite the 3.4% decline in revenue.
- The two continuing divisions, Cake Decoration and Food Ingredients are profitable (before impairment charges) and cash generative; total divisional adjusted EBITDA of £5.8m (see note 3) before central costs.
- Central costs have been materially reduced during the year by £1.3m.
- Goodwill has been impaired by £18.7m (2018: Nil), to reflect the value today of the continuing businesses.
- Bank term debt has been repaid; the invoice discount financing materially reduced
- Net debt at 31 March 2019 stood at £35.7 million (2018: £37.8 million), being predominantly shareholder loans, of which £9.6m is in the form of convertible loan notes.
- A year of significant transition focusing on our core assets, with business disposals, refinancing, and cost reductions.
- During the year, Garrett Ingredients, Haydens Bakery, R&W Scott and Chantilly Patisserie were sold, with total cash proceeds of £18 million, utilised in debt reduction and working capital.
- Significant increase in capacity of Food Ingredients facility following its capital investment programme.
- Appropriate Board structure is now in place in line with our commitment to improved corporate governance.
Post-period end events
- £0.3 million fine paid following AIM Disciplinary Notice relating to failings of corporate governance in and prior to 2017.
- Current trading is in line with the Board's modest expectations.
- Cake Decoration (Renshaw and Rainbow Dust Colours):
- Improved capital base and operating structure, reflective of the turnaround underway.
- Focus on strengthening customer relationships and growing sales.
- Early progress evident although the UK retail sector continues under pressure to rationalise its supplier base.
- Food Ingredients (Brighter Foods):
- Significantly increased capacity since the period end, on the back of demand from existing and new customers.
- Currently selling all its production.
- Bodes well for the division to outperform its modest expectations.
- Further reductions in central costs
- The Group remains focused on continuing to improve its results, and reduce net debt.
Hugh Cawley, Chief Executive commented:
"After a very difficult period in the Group's history and a great deal of corporate activity, Real Good Food plc now comprises two divisions, with clearly articulated objectives and defined strategies to accomplish those objectives. We believe we now have the leadership, the senior management and the resources capable of delivering a further uplift in performance from both businesses, and a substantially lower central cost base more fit for purpose.
"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."