RGD Real Good Food Plc

    RNS Number : 2550Z
  Real Good Food Company Plc (The)
  17 July 2008
   



    The Real Good Food Company plc

    Trading Update 

    The Real Good Food Company plc (Aim: RGD), the food manufacturing group, operating in ambient and chilled sectors of the market, is
today providing the following trading update for the six months to 30 June 2008, prior to entering a close period.

    The current trading environment remains very challenging, with both material and fuel prices reaching unprecedented levels. This,
coupled with lower consumer confidence, further highlights the importance of our back-to-basics approach. A focus on improved operational
efficiency, inventory management, customer service and cash management is paramount, whilst ensuring that our product innovation skills are
enhanced, recognising emerging trends and consumer buying patterns. 

    Sales in our Sugar Division were down on the prior year by 10%. The two principal reasons being the loss of trading volume in one
account as previously reported, and lower prices in the market following the EU reform programme, which has resulted in continuing surplus
stocks in the EU. 

    Volumes in retail remain strong and ahead of the prior year, up 4%. Plans to further develop our dairy trading and blends business are
about to be finalised, ready for implementation in quarter four. Overheads, in line with our back-to-basics programme, were down 10% on the
prior year. Overall profitability was down on the prior year, although in line with our expectations.  

    The latest announcements relating to the commissions EU sugar reform programme are most encouraging, with the market effectively moving
into equilibrium during 2009. However, we expect difficult trading conditions to prevail for the remainder of 2008. 

    Sales in our Bakery Ingredients Division were well ahead of the prior year, up 13%. Gross margins were slightly ahead reflecting the lag
in recovering all of the material inflation. Currently the business is in dialogue with its customers in relation to a further increase in
response to the continued levels of material increases. Operational efficiencies at both factories are much improved and the business is now
well positioned going into the second half, being the busiest trading period.

    In the Bakery Division, sales are 4% down on the prior year, primarily due to poor performance on two key lines, which are currently
being re-developed. Material price increases were partially recovered in the period, however further sales price increases are required in
the remainder of the year, in conjunction with further material rationalisation, to help protect margins. Plans to reduce expensive night
shift premiums are well advanced and are expected to be fully implemented in late July.  

    Finally, the Group is pleased to announce that it has just completed a new 5 year re-financing of its debt arrangements with an asset
backed lending facility provided by a new banking partner.

    Pieter Totte, Chairman, comments:

    "As I indicated in my preliminary results statement, the first half has been characterised by challenging market conditions, with lower
sugar prices on the one hand and higher prices in our bakery and bakery ingredients businesses on the other. The management team is
responding to these difficult conditions by striving for greater operational efficiencies, product innovation and a strong focus on customer
service. We remain confident of achieving a satisfactory result for the full year."

    17 July 2008


    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 7457 2020
 Gareth David
               
       

                        

                           


      





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