RNS Number:8123R
Real Good Food Company Plc (The)
08 April 2008



The Real Good Food Company Plc
("the Group")


Final Results 2007


The Real Good Food Company plc, the sugars, ingredients and bakery company,
today announces its Final Results for the year ended 31 December 2007.




Highlights


  > Group sales from continuing operations increased to �231.1m (2006: �221.7m)


  > Total Group operating Profit before taxation and significant items of �9.6m
    (2006: �13.3m)


  > The sale of Five Star Fish was completed for a total consideration of �35.8m


  > Continuing operations (before significant items) basic and diluted profit
    per share 4.5p (2006: 6.4p)


  > Net debt levels have reduced to �25.9m (2006: �56.6m)





Commenting on the results, Pieter Totte, Chairman of The Real Good Food, said:



"The past year has been a active one for the Group and a period which has seen
much change. Five Star Fish was sold in July for �35.8 million whilst a great
deal of management time and some modest cash investment has been made to improve
the operational performance and competitive profile of our continuing
businesses.



"The current year has started with the Group trading in line with the revised
budget expectations produced at the end of 2007. Market challenges remain
heightened by uncertainties in commodity, credit and consumer markets. The
management's focus will remain on improved operational efficiency, inventory
management, customer service and product innovation. For the full year the Board
expects the Group to report stable profitability from continuing operations as
raw material cost pressures are mitigated by the benefits accrued from both the
efficiency improvement and cost recovery programmes initiated in 2007."



Enquiries:



The Real Good Food Company plc                           Tel: 020 7335 2500
Stephen Heslop Chief Executive
Lee Camfield Finance Director


Shore Capital                                            Tel: 020 7408 4090
Guy Peters


College Hill                                             Tel: 020 7822 0200
Anthony Parker
Gareth David




CHAIRMAN'S STATEMENT


Introduction and Overview


The past year has been an active one for the Group and a period which has seen
much change. Five Star Fish was sold in July for �35.8 million whilst a great
deal of management time and some modest cash investment has been made to improve
the operational performance and competitive profile of our continuing
businesses.

The Group produced turnover of �246.1m (2006: �250.8m) whilst operating profit,
before significant items, for the year amounted to �9.6m (2006: �13.3m)
following the disposal of Five Star Fish. As always, there was pressure from
other suppliers seeking additional market share and from customers seeking
competitive prices. In addition, 2007 saw some major increases in the price of
energy and commodities, both of which present challenges for the supply chains
in which all of our divisions operate. However, we have continued to operate
profitably and to produce positive operational cash flows.

In July the Board appointed Stephen Heslop to be the Group's Managing Director,
in succession to John Gibson, with day to day responsibility transferring in
late September. Stephen has initiated a strategic review of the business, and
this is expected to bring about further changes to the Group's operational
activities, strategic focus and business culture.

The Real Good Food Company was established with an entrepreneurial spirit at its
heart, alongside a solid understanding of commercial realities. These values
still hold true today. However, as time passes, our Group and its markets have
changed. Five Star Fish, for example, had grown and matured to a size and scale
where the Board was finding it increasingly difficult to find the next
significant strategic step for its development. At the same time, the regulatory
environment and structures of the European fish market were shifting, which was
introducing uncertainty as to the future. Hence, a decision was taken to sell
the business at a book profit. Whilst this has led to a significant reduction in
terms of the Group's operating profitability, our net debt has been materially
reduced; our corresponding interest bill has fallen, while our level of gearing
is now less than 40%.

Looking at the structure of the Group today, it is clear that, in terms of both
revenue and profits, our Sugar Division has now become even more dominant. When
we purchased Napier Brown in 2005 we were aware that both the structure of the
Group's composition would be changed and also that regulatory change was
underway in the European sugar market.

After a slow initial response on the part of European sugar producers to provide
voluntary cuts in production quotas, the EU Commission considerably revamped its
restructuring scheme and has subsequently been able to announce that an
additional 2.5 million tonnes of sugar quota has been relinquished from 2008-09.
This brings the total of sugar quota permanently renounced so far, to close to
4.5 million tonnes (of the Commission's initial target of 6 million tonnes).

The Commission, whilst being delighted by the recent cut backs, has taken the
opportunity to remind European sugar producers that the market is still over 1
million tonnes short of the target reduction and an announcement regarding
further renouncements made by the 31st March 2008 is expected from the
Commission soon. Should there be no further quota renunciation then the
Commission has announced in a revised timetable; that in February 2010 a
unilateral permanent quota, without compensation, will be introduced across all
member states to make up any outstanding shortfall.

Therefore, there appears to be some ground for optimism that the structural
surplus, that has been overhanging the market in recent years, is diminishing.
With demand for sugar in the EU expected to remain stable at approximately 16
million tonnes, the end of the restructuring period (Q4 2010), should see some
3.5 to 4.0 million tonnes of cane sugar begin to be imported into the EU, either
for refining or for direct consumption.

Unless preferential suppliers in the Least Developed Countries (LDC) and
African, Caribbean and Pacific Countries (ACP), can significantly increase their
output of refined sugar, it seems likely that more refining capacity will be
required in the EU and to that end, in the past year industry plans to build two
new cane refineries have been announced with a combined capacity of 700,000
tonnes. A number of beet processors have also indicated that they will be
processing cane sugar through their beet plants during the closed season.

The Group's Sugar Division is the UK's third largest trader in sugars and
operates within many niche areas. It is with this in mind that we are already
seeking to position the Group to its best advantage so as to maximise the
opportunities arising from the sugar market's structural changes.

The Board therefore expects that, during the next 18 months, the Group will
announce further important initiatives, which will help position the Sugar
Division to take full advantage of future opportunities. Achieving success in
this activity is the most important task confronting the Board in 2008 and
beyond.


Outlook

The current year has started with the Group trading in line with the revised
budget expectations produced at the end of 2007. Market challenges remain
heightened by uncertainties in commodity, credit and consumer markets. The
management's focus will remain on improved operational efficiency, inventory
management, customer service, product innovation and tight cash management. For
the full year the Board expects the Group to report stable profit before tax
from continuing operations as raw material cost pressures are mitigated by the
benefits accrued from both the efficiency improvement and cost recovery
programmes initiated in 2007.



P W Totte
Chairman
April 2008




OPERATING DIVISION REVIEWS

Sugar Division
                                             Year ended               Year ended
                                            31 December              31 December
                                                   2007                     2006
                                                 �'000s                   �'000s

Revenue(1)                                      190,084                  180,053
Operating profit(2)                               6,390                    7,368
Operating profit %                                  3.4                      4.1



(1) Including inter-company trading.

(2) Normalised operating profit before significant items and central costs.


Napier Brown Foods supplies a range of sugar and dry ingredients to food
manufacturers and packs sugar for retail grocery and foodservice customers from
its facilities at Normanton, near Leeds.

Overall revenues were ahead of last year by almost 6%, although behind our
original expectations due to a more competitive market in the second half of the
year.

Revenue growth was principally driven by strong retail volumes and higher
industrial sales in the first half of the year. As a consequence of less
favourable market conditions in the second half, the volume gains from the early
part of the year were not repeated.

Operating efficiencies in the factory continued to improve throughout the year
resulting in an improved overhead position. Work continues with further
commissioning of another high speed packing line which will create additional
capacity and operational benefits.

During the year we were able to extend our sourcing arrangements for special
sugars as we continue to offer the broadest range of materials. Distribution
costs during the year were adversely affected by a number of factors. The key
drivers being increased fuel costs, international freight and longer journeys in
relation to local sourcing arrangements.

A number of management changes are currently underway to further strengthen the
team going forward.



Bakery Ingredients Division

                                             Year ended               Year ended
                                            31 December              31 December
                                                   2007                     2006
                                                 �'000s                   �'000s

Revenue(1)                                       31,920                   33,183
Operating profit(2)                               2,350                    3,092
Operating profit %                                  7.4                      9.3



(1) Including inter-company trading.

(2) Normalised operating profit before significant items and central costs.




Renshaw supplies a range of high quality food ingredients primarily to the
bakery sector, comprising craft bakers and major cake manufacturers and also to
grocery retailers. It operates two facilities, one in Liverpool and the other in
Carluke, south-east of Glasgow.

Revenues in the year were in line on a like for like basis, having been adjusted
for the discontinued nut activity and �395k of non recurring income in relation
to a Supply Agreement. Gross margins were steady despite significant raw
material price inflation as operational performance improved during the year.
Overheads increased year on year reflecting the full year effect of the new
management team, technical support and additional marketing support in our core
areas. Reflecting consumer trends the business has developed our full range of
products in non-hydrogenated variants.

Plans to further advance performance are now established and we are well
positioned to maximise new business opportunities, which include a new range of
syrups for consumption in coffee shops and new business lines being developed
with Marks & Spencer.



Bakery Division

                                             Year ended               Year ended
                                            31 December              31 December
                                                   2007                     2006
                                                 �'000s                   �'000s

Revenue(1)                                       18,217                   17,174
Operating profit(2)                                  71                       68
Operating profit %                                  0.4                      0.4



(1) Including inter-company trading.

(2) Normalised operating profit before significant items and central costs.



Hayden's Bakeries produces chilled and ambient premium patisserie and dessert
products to retail grocery customers. It operates from a site in Devizes,
Wiltshire.

The business continued to see strong revenue growth in the year of 6% driven by
good progress in the chilled desserts sector. Overall gross margins were diluted
as a consequence of higher raw material costs and the introduction of revised
trading terms in the first quarter. Overheads were in line with the previous
year and as a result of these factors profitability remained flat in the period.

The second frying line was successfully commissioned in the late summer which
has allowed us to reduce premium working in this area. Following the business
review, announced in the Group's pre-close statement in December, a number of
initiatives to improve factory efficiency and reduce cost have been identified;
these will be progressed and are expected to improve gross margins in the second
half of 2008.


Fish Division

                                             Year ended               Year ended
                                            31 December              31 December
                                                   2007                     2006
                                                 �'000s                   �'000s

Revenue(1)                                       14,962                   29,075
Operating profit(2)                               2,158                    4,011
Operating profit %                                 14.4                     13.8



(1) Including inter-company trading.

(2) Normalised operating profit before significant items and central costs.


The sale of Five Star Fish was completed on 12 June 2007 for a gross
consideration of �35.8m. Tax charges on the disposal were �6.2m. At the time of
the disposal revenue was ahead of the previous year, due to the combination of
raw material price inflation being passed on in price increases to customers and
improvements in sales volumes.



FINANCE DIRECTOR'S REPORT


Revenue

Group revenue from continuing operations was up 4.2% to �231.1m, primarily
reflecting, as already reported, increased industrial revenue within our Sugar
Division, where revenue was 5.6% ahead of the prior year.

Revenue within our Bakery Ingredients Division was 3.8% behind 2006, although
once adjusted for discontinued nut activity and a non-recurring revenue item,
relating to our supply agreement in 2006, revenue was in line with the prior
year.

At our Bakery Division revenue increased by 6.1%, a fourth successive year of
growth driven by organic growth with our primary customers and a number of new
product launches.


Margins

Continuing operations gross profit margins of 12.8% (2006: 13.1%) largely
reflect increased sales of low margin business within our Sugar Division and
delays in recovering raw material cost inflation from our customer base within
our Bakery Ingredients and Bakery Divisions.


Profit before tax

Group operating margins for continuing operations (before significant items)
reduced by one percentage point to 3.2%, driven by; the lower margin business;
increased distribution costs reflecting fuel increases and longer journeys; and
investment within the Bakery Ingredients Division in the management team,
marketing support and technical teams. Resultant Profit before tax was �4.0m
(2006: �5.6m).


Discontinued Operations

In the early part of 2007 the Group agreed to sell the trade and assets of its
Fish Division, Five Star Fish, for a gross consideration of �35.0m, subsequently
increased to �35.8m upon finalisation of the completion balance sheet. Tax
charges arising as a result of the disposal amount to �6.2m. The division
achieved �2.1m operating profit before tax, whilst the sale generated a profit
on disposal of �1.9m after tax.


Significant Items

During the year the Group incurred continuing operations significant items
charges of �0.5m. These largely relate to payments to the Group's former Group
Managing Director for his loss of office and further restructuring charges
relating to the re-organisation of the divisional executive teams.

As already mentioned the Group disposed of its Fish Division, Five Star Fish
during the first half of the year. The profit on disposal was:



                                                                                          �Ms
Disposal proceeds                                                                         35.8
Net assets sold                                                                          (10.5)
Goodwill sold                                                                            (15.5)
Costs                                                                                    (1.7)



Pre tax profit on disposal                                                                8.1
Tax on disposal                                                                          (6.2)
Net profit on disposal                                                                    1.9






Cash Flow and Debt


Net debt at the year end was �25.9m a reduction of �30.7m from the position at
the end of 2006. The majority of the reduction in debt is attributable to the
disposal proceeds of the sale of Five Star Fish. It should be noted that of the
tax relating to the disposal, �2.6m will be paid in the first half of 2008.


Pensions

The subsidiaries of the Group, Napier Brown Foods Limited and Napier Brown and
Company Limited, operate a defined benefit pension scheme. The scheme is closed
with benefits no longer accruing. The IAS 19 valuation of the scheme at the year
end identified a �1.8m surplus, an improvement of �3.0m on the prior year.
During the year the Group contributed �127k to the scheme.





CONSOLIDATED INCOME STATEMENT YEAR ENDED 31 DECEMBER 2007


                        Notes  Year ended 31 December 2007              Year Ended 31 December 2006
                                        Before  Significant                       Before  Significant                   
                                   Significant        Items                  Significant        Items
                                         Items     (Note 2)        Total           Items     (Note 2)        Total 
CONTINUING OPERATIONS                   �'000s       �'000s       �'000s          �'000s       �'000s       �'000s

REVENUE                                231,144            -      231,144         221,736            -      221,736
Cost of sales                        (201,508)            -    (201,508)       (192,659)        (243)    (192,902)

GROSS PROFIT                            29,636            -       29,636          29,077        (243)       28,834
Distribution costs                    (10,367)                  (10,367)         (8,052)                   (8,052)
Administration expenses               (11,829)        (523)     (12,352)        (11,714)        (858)     (12,572)

OPERATING PROFIT                         7,440        (523)        6,917           9,311      (1,101)        8,210

Finance income                             500            -          500             284            -          284
Finance costs                          (4,151)            -      (4,151)         (4,358)            -      (4,358)
Other finance income                       184            -          184             372            -          372

PROFIT/(LOSS) BEFORE      
TAXATION                                 3,973        (523)        3,450           5,609      (1,101)        4,508

Income tax expense      3              (1,047)          157        (890)         (1,489)          292      (1,197)

PROFIT/(LOSS) FROM
CONTINUING OPERATIONS                    2,926        (366)        2,560           4,120        (809)        3,311
                                       
DISCONTINUED OPERATIONS

REVENUE                                 14,962            -       14,962          29,075            -       29,075
Operating expenses                    (12,803)            -     (12,803)        (25,064)            -     (25,064)
OPERATING PROFIT                         2,159            -        2,159           4,011            -        4,011
Finance costs                             (96)                      (96)           (209)            -        (209)

Profit on sale of      
division                                     -        8,070        8,070               -            -            -

PROFIT/(LOSS) BEFORE        
TAXATION                                 2,063        8,070       10,133           3,802            -        3,802
                                                                                                    -
Income tax expense      3                (690)      (6,210)      (6,900)         (1,082)            -      (1,082)

PROFIT FROM
DISCONTINUED
OPERATIONS                               1,373        1,860        3,233           2,720            -        2,720

PROFIT FOR THE YEAR                      4,299        1,494        5,793           6,840        (809)        6,031
Basic and diluted                                                
profit per share                                                    8.9p                                      9.3p
Adjusted profit per           
share                                     6.6p                                     10.5p
Continuing operations           
basic and diluted
profit per share                          4.5p                                      6.4p
Discontinued operations         
basic and diluted
profit per share                          2.1p                      5.0p            4.2p                      4.2p





CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007


                                           Issued Share Share Premium Share Option     Retained      
                                                Capital       Account      Reserve     earnings       Total
                                                 �'000s        �'000s       �'000s       �'000s      �'000s

Balance as at 1 January 2006                      1,297        68,773           34      (3,062)      67,042

Shares options to be issued                           -             -           19            -          19

Profit for the year                                   -             -            -        6,031       6,031

Actuarial loss related to pension                     -             -            -        (620)       (620)
scheme

Deferred tax attributable to actuarial loss           -             -            -          186         186

Total recognised income and expense             
for the year                                          -             -           19        5,597       5,616

Balance as at 31 December 2006                    1,297        68,773           53        2,535      72,658


Balance as at 1 January 2007                      1,297        68,773           53        2,535      72,658

Shares options to be issued                           -             -           20            -          20

Share options exercised in year                       3            97          (7)            -          93

Profit for the year                                   -             -            -        5,793       5,793

Actuarial gain related to pension        
scheme                                                -             -            -          911         911

Deferred tax attributable to actuarial gain           -             -            -        (274)       (274)

Total recognised income and expense        
for the year                                          3            97           13        6,430       6,543

Balance as at 31 December 2007                    1,300        68,870           66        8,965      79,201





CONSOLIDATED BALANCE SHEET 31 DECEMBER 2007
                                                                             Year ended           Year ended
                                                                            31 December          31 December
                                                                                   2007                 2006
                                                       Notes                     �'000s               �'000s
                                                       

NON CURRENT ASSETS
Goodwill                                                                         75,796               90,611
Other intangible assets                                                             547                  532
Property, plant and equipment                                                    16,721               18,186
                                                                                 93,064              109,329
CURRENT ASSETS
Inventories                                                                       9,353               14,685
Trade and other receivables                                                      24,784               29,224
Derived financial instruments                          4                            113                   63
Cash and cash equivalents                                                        13,780               12,412
                                                                                 48,030               56,384

TOTAL ASSETS                                                                    141,094              165,713

CURRENT LIABILITIES
Trade and other payables                                                         17,289               20,221
Borrowings                                                                       22,479               10,235
Derived financial instruments                          4                             81                   18
Current tax liabilities                                4                          3,615                  628
                                                                                 43,464               31,102

NON CURRENT LIABILITIES
Borrowings                                             4                         17,161               59,207
Deferred tax liabilities                                                            912                1,124
Provisions                                                                          356                  766
Retirement benefit obligations                                                        -                  856
                                                                                 18,429               61,953


TOTAL LIABILITIES                                                                61,893               93,055



NET ASSETS                                                                       79,201               72,658

EQUITY
Share capital                                                                     1,300                1,297
Share premium account                                                            68,870               68,773
Share option reserve                                                                 66                   53
Retained earnings                                                                 8,965                2,535

TOTAL EQUITY                                                                     79,201               72,658





These financial statements were approved by the Board of Directors and
authorised for issue on 3 April 2008. They were signed on its behalf by:





P W Totte                                                        L M Camfield
Chairman                                                          Director




CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 DECEMBER 2007

                                                                          Year ended           Year ended
                                                                    31 December 2007     31 December 2006
                                                                              �'000s               �'000s
CASH FLOW FROM OPERATING ACTIVITIES
Adjusted for:
Profit before taxation                                                        13,583                8,310
Finance costs                                                                  4,247                4,567
Finance income                                                                 (500)                (284)
IAS 19 income                                                                  (184)                (372)
Depreciation of property, plant & equipment                                    1,645                1,834
Amortisation of intangibles                                                      148                   91
(Profit)/Loss on disposal of fixed assets                                          -                (175)
Share based payment expense                                                       13                   19
Gain on disposal of discontinued operation                                   (8,070)                    -
Operating Cash Flow                                                           10,882               13,990

Increase in inventories                                                      (2,168)                (296)
(Increase)/Decrease in receivables                                             (511)                1,117
Increase/(Decrease) in payables                                                  484              (2,351)
Cash generated from operations                                                 8,687               12,460

Income taxes paid                                                            (1,607)                (660)
Interest paid                                                                (3,960)              (4,567)
Net cash from operating activities                                             3,120                7,233

CASH FLOW FROM INVESTING ACTIVITIES
Interest received                                                                409                  300
Disposal of division                                                          34,333                    -
Cost of acquisition                                                                -              (2,489)
Income tax paid on disposal of division                                      (3,410)                    -
Proceeds on disposal of property, plant & equipment

                                                                                 113                  630
Purchase of intangible assets                                                  (163)                (237)
Purchase of property, plant & equipment                                      (3,067)              (2,633)
Net cash (used in)/from investing activities                                  28,215              (4,429)

CASH FLOW USED IN FINANCING ACTIVITIES
Repayment of borrowings                                                     (27,476)              (3,890)
Repayment of obligations under finance leases                                  (362)                (279)
Hire purchases advances                                                          263                  943
Proceeds on issue of shares                                                      100                    -
Net cash used in financing activities                                       (27,475)              (3,226)
                                                                               3,860                (422)

NET INCREASE/(DECREASE) IN CASH AND CASH  EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year                                 6,925                7,347
Net movement in cash and cash equivalents                                      3,860                (422)

Cash and cash equivalents at end of year                                      10,785                6,925

Cash and cash equivalents comprise:                                           13,780               12,412
Cash                                                                         (2,995)              (5,487)
Overdrafts                                                                    10,785                6,925






NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2007
 

1.     PRESENTATION OF FINANCIAL STATEMENTS



General Information

The Real Good Food Company plc is a public limited company incorporated in the
United Kingdom under the Companies Act 1985 (registered number 4666282). The
company is domiciled in the United Kingdom and its registered address is
International House, 1 St Katharine's Way, London, E1W 1XB. The Company's shares
are traded on the Alternative Investment Market (AIM).

The principal activities of the Group are the sourcing, manufacture and
distribution of food to the retail and industrial sectors.


Basis of preparation

These consolidated financial statements are presented for the first time on the
basis of International Financial Reporting Standards (IFRS) as adopted by the
European Union. These standards have been adopted with effect from 1 January
2006 as required under AIM rules and therefore the comparative figures for year
ended 31 December 2006 have been restated to include the effect of this
adoption. An explanation of the effect this has had on the 2006 figures is
included in the Appendix to these financial statements.


2.      SIGNIFICANT ITEMS


                                                        Notes               Year ended              Year ended
                                                                           31 December             31 December
                                                                                  2007                    2006
                                                                                �'000s                  �'000s

Profit on disposal of division                          26                       8,070                       -
Management restructuring costs                                                   (523)                 (1,101)

                                                                                 7,547                 (1,101)
Taxation (charge)/credit on significant items                                  (6,053)                     292
                                                                                 1,494                   (809)



3.     TAXATION


                                                                            Year ended              Year ended
                                                                           31 December             31 December
                                                                                  2007                    2006
                                                                                �'000s                  �'000s
CURRENT TAX
UK Current tax on profits of the period                                            890                   1,588
UK Corporation tax on discontinued activities                                      690                       -
Exceptional items                                                                6,329                       -
Adjustments in respect of prior periods                                              -                   (409)

Total current tax                                                                7,909                   1,179

Deferred Tax
Deferred tax charge re pension scheme                                               93                     164
Origination and reversal of timing differences                                   (137)                     936
Effect of tax rate change on deferred tax                                         (75)                       -
Total deferred tax                                                               (119)                   1,100

Tax on profit on ordinary activities                                             7,790                   2,279



4.     BORROWINGS


                                                                  Year ended                  Year ended
                                                               31 December 2007            31 December 2006
                                                             Group        Company           Group      Company
                                                            �000's         �000's          �000's       �000's
Unsecured borrowings at amortised cost
Bank overdrafts                                              2,995            860           5,487          656
Loan notes                                                   3,422              -           3,158            -

Secured borrowings at amortised cost
   Bank loans                                               32,169         32,169          59,645       59,645
   Hire purchase                                             1,054            428           1,152          364

                                                            39,640         33,457          69,442       60,665

Amounts due for settlement within 12 months                 22,479         20,234          10,235        5,257

Amounts due for settlement after 12 months                  17,161         13,223          59,207       55,408

                                                            39,640         33,457          68,998       60,665



Features of the Group's borrowings are as follows:

The Group's financial instruments comprise cash, a term loan, hire purchase and
finance leases, revolving credit facility, overdraft and various items arising
directly from its operations such as trade payables and receivables. The main
purpose of these financial instruments is to finance the Group's operations.

The main risks from the Group's financial instruments are interest rate risk and
liquidity risk. The Group also has some currency exposure in relation to its
sugar trade but the majority of this risk is hedged. The Board reviews and
agrees policies, which have remained substantially unchanged for the year under
review, for managing these risks.



5.     SEGMENT REPORTING

Primary Format - Business segments

The Group has adopted IFRS 8 'Operating segments' in advance of its effective
date, with effect from 1 January 2006. IFRS 8 requires that operating segments
be identified on the basis of internal reporting and decision-making. This is
consistent with the previous Divisional reporting that the Group previously
published and therefore the information is consistent with that of previous
financial statements.

The following table shows the Group's revenue and results for the year under
review analysed by operating segment. Segment profit represents the trading
profit after depreciation but before any interest and significant items.


Year ended 31 December 2007                                 Head Office &   Continuing   
                                        Bakery              Consolidation   Operations   Discontinued     Total
                            Sugar  Ingredients     Bakery      Adjustment        Total     Operations     Group

Revenue - External        181,831       31,096     18,217               -      231,144         14,962    246,106
Revenue - Internal          8,253          824          -         (9,077)            -              -          -

Total revenue             190,084       31,920     18,217         (9,077)      231,144         14,962    246,106

Operating Profit            6,390        2,350         71         (1,371)        7,440          2,159      9,599

Significant items                                                                (523)              -      (523)
Profit on sale of division                                                           -          8,070      8,070


Earnings before interest and tax                                                 6,917         10,229     17,146

Net interest                                                                   (3,651)           (96)    (3,747)
Pension finance income                                                             184              -        184

Tax                                                                              (890)        (6,900)    (7,790)

Profit after tax                                                                 2,560          3,233      5,793




Inter-segment sales are charged at prevailing market rates.


The group operates a central function, finance costs cannot be meaningfully
allocated to individual operating divisions.


6.     DISTRIBUTION OF THE ANNUAL REPORT AND ACCOUNTS TO SHAREHOLDERS

The announcement set out above does not constitute a full financial statement of
the company's affairs for the year ended 31 December 2007. The company's
auditors have reported on the full accounts of the said years and have
accompanied them with an unqualified report. The accounts have yet to be
delivered to the Registrar of Companies.

This annual report and accounts will be posted to all shareholders of the
Company, and will be available on our web site www.realgoodfoodplc.com and for
inspection by the public at the registered office of the Company during normal
business hours on any weekday. Further copies will be available on request from
The Real Good Food Company plc, International House, 1 St Katharine's Way,
London, E1W 1XB.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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