TIDMRGD
RNS Number : 7922Z
Real Good Food Company Plc (The)
29 September 2009
The Real Good Food Company plc (AIM: RGD)
Interim Results for the six months ended 30 June 2009
The Real Good Food Company plc ("the Group"), the sugars, ingredients and
bakery company, today announces Interim Results for six months ended 30 June
2009
Highlights
* Trading conditions stabilizing in core sugar business
* Improved Operating Profitability in Bakery Ingredients and Bakery Division
* Total Group sales from continuing operations down 2.2% to GBP101.7m (2008:
GBP104.0m) reflecting the price and volume pressures in the Sugar Division as a
result of regime change
* Loss from Continuing Operations of GBP0.889m (2008: loss of GBP1.159m)
* Loss per share (basic and diluted) of 1.3p (2008: loss per share of 1.8p)
* Net Cash from Operating activities GBP0.504m versus (GBP1.467m) deficit in 2008
Pieter Totté, Chairman of The Real Good Food Company plc, comments:
"The group continues to trade in line with its plan and with its commitments
associated with its banking arrangements. We are currently benefiting from the
consolidation of Renshaw Napier business with underlying overheads reducing with
a full year impact flowing through 2010. The business is focussed on cash
generation by further reducing Working Capital levels and focusing on EBITDA
performance.
"With further stability expected in the sugar market, improved profitability in
both ingredients and bakery, we remain quietly confident regarding the remainder
of the year as we move into our busiest seasonal period."
29 September 2009
ENQUIRIES:
+----------------------------------------------+----------------------------+
| The Real Good Food Company plc | Tel: 0151 706 8200 |
+----------------------------------------------+----------------------------+
| Stephen Heslop, Chief Executive Officer | |
+----------------------------------------------+----------------------------+
| Mike McDonough, Chief Financial Officer | |
+----------------------------------------------+----------------------------+
| | |
+----------------------------------------------+----------------------------+
| Shore Capital | Tel: 020 7408 4090 |
+----------------------------------------------+----------------------------+
| Guy Peters | |
+----------------------------------------------+----------------------------+
| | |
+----------------------------------------------+----------------------------+
| College Hill | Tel: 020 7457 2020 |
+----------------------------------------------+----------------------------+
| Gareth David | |
+----------------------------------------------+----------------------------+
CHAIRMAN'S STATEMENT
Overview
As I indicated in my comments at the time of our Annual General Meeting in July,
the first six months of the current year have seen welcome signs of stability
returning to our markets, after lengthy period in which we have had to cope with
the combination of changes to the EU sugar regime, high raw materials and fuel
prices and a fiercely competitive market-place.
Total Group turnover for this period was down slightly at GBP101.7m (2008:
GBP104.0m), with sales improvements at our Bakery Ingredients and Bakery
Divisions, which both improved their operating performance year-on-year, driven
by increased margins and lower overheads. This was offset by a 4.3% reduction in
sales at our Sugar Division to GBP78.1m (2008: GBP81.7m).
The loss from continuing operations of GBP0.889m represents an improvement from
the comparable figure of GBP1.159m.
For the purposes of clarity, we will continue to report our results under the
three previous segmental headings: Sugar, Bakery Ingredients and Bakery.
Within Renshawnapier, where our core sugar trading business has experienced
three years of difficult trading, I can report that overall we feel that our
group is starting to turn the corner and we look with more confidence towards
the future. EU Sugar regime changes are in their last phase, with the final
adjustment of the reference price on 1 October 2009.
Having seen some restoration of stability this year in the sugar market, with
the European sugar market more or less in balance as far as offer and demand is
concerned, we now expect it to strengthen as we go forward. We do expect still
further rationalisation in the EU marketplace, but the biggest adjustments have
been made.
Our Bakery Ingredients Division has had a good start to the year with sales up
1.4% driving increased profitability in what is its "off season".
Our Bakery Division has also had a good first half of the year, with sales up
12% year on year and the business trading ahead of budget. We have enjoyed
considerable success in new product development, achieving more product launches
with all our customers for Quarter Four and early next year than ever during our
ownership. We are looking forward to second half 2009 and believe that the
business is well placed to grow both sales and profitability in 2010.
SUGAR DIVISION
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.
+----------------------------------------+------------+----------+
| GBP'000s | 2009 | 2008 |
| |Six Months | Six |
| | | Months |
+----------------------------------------+------------+----------+
| | | |
+----------------------------------------+------------+----------+
| Sales | 78,145 | 81,653 |
| EBITDA | 520 | 2,126 |
+----------------------------------------+------------+----------+
| Operating Profit* | 218 | 1,838 |
+----------------------------------------+------------+----------+
The Board is pleased to be able to confirm we have since seen some stability
during 2009 with our trading in line with budget and latest estimates both in
terms of Operating Profits and Cash generation following the margin pressures
encountered in the second half of last year. Operating Profits however are down
for the period as the six months to June 2008 was unaffected.
BAKERY INGREDIENTS DIVISION
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.
+----------------------------------------+------------+----------+
| GBP'000s | 2009 | 2008 |
| |Six Months | Six |
| | | Months |
+----------------------------------------+------------+----------+
| | | |
+----------------------------------------+------------+----------+
| Sales | 13,977 | 13,784 |
| EBITDA | 552 | 428 |
+----------------------------------------+------------+----------+
| Operating Profit* | 188 | 78 |
+----------------------------------------+------------+----------+
Sales in the period were in line with last year overall, with operating profit
benefiting from reduced overheads and reduced material costs in some
commodities. Industrial volumes are lower but there has been growth in the
Retail and Export sectors. Being a seasonal business, with the majority of the
profitability in the second half of the year, the Board is pleased to be able to
report the business is robust and well placed in delivering expectations for the
remainder of the year
BAKERY DIVISION
Hayden's Bakeries produces chilled and ambient premium patisserie and dessert
products to retail grocery customers. It operates from a site in Devizes,
Wiltshire.
+----------------------------------------+------------+----------+
| GBP'000s | 2009 | 2008 |
| |Six Months | Six |
| | | Months |
+----------------------------------------+------------+----------+
| | | |
+----------------------------------------+------------+----------+
| Sales | 9,575 | 8,535 |
| EBITDA | 144 | 22 |
+----------------------------------------+------------+----------+
| Operating Loss* | (198) | (275) |
+----------------------------------------+------------+----------+
The 12% increase in sales was driven by continued development of our Foodservice
offering into the coffee shop sector, new product launches, range extensions and
promotional activity with leading customers. Overall, profitability has improved
on the prior period and is now making a positive contribution. Operationally,
the team continues to refine production methodologies, which has seen an
improvement in material variances, which has offset the labour necessary to
affect the improvements.
SIGNIFICANT ITEMS
During the period under review, the Group incurred a number of significant
items. The principal cost relating to the restructuring of the Groups operations
to form Renshawnapier.
CASH FLOW AND DEBT
Net cashflow from operating activities was GBP0.5m, up GBP1.971m on prior year
reflecting the focus on working capital. Overall borrowings at GBP31.163m are at
a similar level to last year and in line with expectations.
PENSIONS
The GBP1.771m deterioration in the IAS 19 pension valuation is the result of two
factors, reduction in plan asset values as a result of changes in the financial
markets during the interim period, together with an increased long term outlook
for inflation which has increased the scheme liabilities. The scheme has been
closed to new entrants since April 2004
CURRENT TRADING
The Group continues to trade in line with its plan and with its commitments
associated with its banking arrangements.
We are currently benefiting from the consolidation of the Renshaw and Napier
businesses with underlying overheads reduced and expect these to continue to
flow through into 2010. With further stability expected in the sugar market,
improved profitability in both ingredients and bakery, we remain quietly
confident regarding the remainder of the year as we move into our busiest
seasonal period.
PIETER TOTTÉ
Chairman
29 September 2009
REPORT OF THE AUDITORS
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2009, which comprises the consolidated statement of comprehensive income,
consolidated statement of financial position, consolidated statement of changes
in equity, consolidated statement of cashflows and the related notes. We have
read the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company, as a body, in accordance with our
instructions. Our review has been undertaken so that we might state to the
company those matters we are required to state to them in a review report and
for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company, for our work, for
this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting," as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2009 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union.
Horwath Clark Whitehill LLP
Chartered Accountants
10 Palace Avenue
Maidstone
Kent
ME15 6NF
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDING 30 JUNE
2009 (UNAUDITED)
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | Notes | Period ended 30 June 2009 | Period Ended 30 June 2008 |
+---------------------------+--------+------------------------------------------+---------------------------------------+
| | | Before | Significant | Total | Before | Significant | Total |
| | | Significant | Items | | Significant | Items | |
| | | Items | | | Items | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | GBP000s | GBP000s | GBP000s | GBP000s | GBP000s | GBP000s |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| CONTINUING OPERATIONS | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| REVENUE | | 101,697 | - | 101,697 | 103,972 | - | 103,972 |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Cost of sales | | (92,043) | - | (92,043) | (92,821) | - | (92,821) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| GROSS PROFIT | | 9,654 | - | 9,654 | 11,151 | - | 11,151 |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Distribution costs | | (4,113) | - | (4,113) | (4,371) | - | (4,371) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Administration | | (5,962) | (84) | (6,046) | (5,859) | (1,365) | (7,224) |
| expenses | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| OPERATING (LOSS)/PROFIT | | (421) | (84) | (505) | 921 | (1,365) | (444) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Finance income | | 264 | - | 264 | 106 | - | 106 |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Finance costs | | (944) | - | (944) | (1,407) | - | (1,407) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Net Pension finance | | (9) | - | (9) | 157 | - | 157 |
| (cost)/income | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| LOSS BEFORE TAXATION | | (1,110) | (84) | (1,194) | (223) | (1,365) | (1,588) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Taxation | | 281 | 24 | 305 | 19 | 410 | 429 |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| LOSS FROM CONTINUING | | (829) | (60) | (889) | (204) | (955) | (1,159) |
| OPERATIONS | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| LOSS FROM DISCONTINUED | | - | - | - | - | - | - |
| OPERATIONS | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| LOSS FOR THE PERIOD | | (829) | (60) | (889) | (204) | (955) | (1,159) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Other comprehensive | | | | | | | |
| income | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Actuarial losses on | | (1,771) | - | (1,771) | (201) | - | (201) |
| defined benefit plans | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Income tax relating to | | 482 | - | 482 | 56 | - | 56 |
| components of other | | | | | | | |
| comprehensive income | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| TOTAL COMPREHENSIVE | | (2,118) | (60) | (2,178) | (349) | (955) | (1,304) |
| INCOME FOR THE PERIOD | | | | | | | |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Basic Loss per share | 5 | (1.3) | | (1.4) | (0.3) | | (1.8) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
| Diluted Loss per share | 5 | (1.3) | | (1.4) | (0.3) | | (1.8) |
+---------------------------+--------+----------------+-------------+-----------+-------------+-------------+-----------+
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2009 (UNAUDITED)
+--------------------------------+-------------+-------------+-------------+
| GROUP FINANCIAL POSITION | | | |
| As at 30 June 2009 | | | |
+--------------------------------+-------------+-------------+-------------+
| | 30 June | 30 June | 31 Dec 2008 |
| | 2009 | 2008 | |
+--------------------------------+-------------+-------------+-------------+
| | GBP'000s | GBP'000s | GBP'000s |
+--------------------------------+-------------+-------------+-------------+
| ASSETS | | | |
| Non Current Assets | | | |
+--------------------------------+-------------+-------------+-------------+
| Goodwill | 75,796 | 75,796 | 75,796 |
+--------------------------------+-------------+-------------+-------------+
| Intangibles | 485 | 587 | 513 |
+--------------------------------+-------------+-------------+-------------+
| Property, plant and equipment | 15,644 | 16,770 | 16,408 |
+--------------------------------+-------------+-------------+-------------+
| Deferred tax asset | 1,600 | - | 853 |
+--------------------------------+-------------+-------------+-------------+
| | 93,525 | 93,153 | 93,570 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| Current Assets | | | |
+--------------------------------+-------------+-------------+-------------+
| Inventory | 10,291 | 11,970 | 10,963 |
+--------------------------------+-------------+-------------+-------------+
| Trade and other receivables | 23,913 | 24,749 | 24,763 |
+--------------------------------+-------------+-------------+-------------+
| Financial instruments at fair | 25 | 1 | 117 |
| value | | | |
+--------------------------------+-------------+-------------+-------------+
| Corporation tax | 574 | 556 | 839 |
+--------------------------------+-------------+-------------+-------------+
| Cash and cash equivalents | 2,208 | 7,769 | 1,464 |
+--------------------------------+-------------+-------------+-------------+
| | 37,011 | 45,045 | 38,146 |
+--------------------------------+-------------+-------------+-------------+
| Total Assets | 130,536 | 138,198 | 131,716 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| LIABILITIES | | | |
| Current Liabilities | | | |
+--------------------------------+-------------+-------------+-------------+
| Borrowings | 20,642 | 22,223 | 19,258 |
+--------------------------------+-------------+-------------+-------------+
| Trade and other payables | 16,189 | 19,580 | 16,787 |
+--------------------------------+-------------+-------------+-------------+
| Financial instruments at fair | 160 | 37 | 524 |
| value | | | |
+--------------------------------+-------------+-------------+-------------+
| | 36,991 | 41,840 | 36,569 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| Non Current Liabilities | | | |
+--------------------------------+-------------+-------------+-------------+
| Borrowings | 12,729 | 16,921 | 13,652 |
+--------------------------------+-------------+-------------+-------------+
| Deferred tax | 2,963 | 982 | 2,973 |
+--------------------------------+-------------+-------------+-------------+
| Provisions | 452 | 545 | 684 |
+--------------------------------+-------------+-------------+-------------+
| Retirement benefit obligations | 1,995 | - | 264 |
+--------------------------------+-------------+-------------+-------------+
| | 18,139 | 18,448 | 17,573 |
+--------------------------------+-------------+-------------+-------------+
| Net Assets | 75,406 | 77,910 | 77,574 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| SHAREHOLDERS' EQUITY | | | |
+--------------------------------+-------------+-------------+-------------+
| Called up share capital | 1,300 | 1,300 | 1,300 |
+--------------------------------+-------------+-------------+-------------+
| Share premium account | 68,870 | 68,870 | 68,870 |
+--------------------------------+-------------+-------------+-------------+
| Other reserves | 83 | 79 | 73 |
+--------------------------------+-------------+-------------+-------------+
| Profit and loss account | 5,153 | 7,661 | 7,331 |
+--------------------------------+-------------+-------------+-------------+
| | | | |
+--------------------------------+-------------+-------------+-------------+
| Total Equity | 75,406 | 77,910 | 77,574 |
+--------------------------------+-------------+-------------+-------------+
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDING 30 JUNE 2009
(UNAUDITED)
+----------------------------+----------+----------+------------+----------+----------+
| | Issued | Share | IFRS 2 | Retained | Total |
| | Share | Premium | Share | Earnings | |
| | Capital | Account | Option | | |
| | | | reserve | | |
+----------------------------+----------+----------+------------+----------+----------+
| | GBP'000s | GBP'000s | GBP'000s | GBP'000s | GBP'000s |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Balance at 1 January 2008 | 1,300 | 68,870 | 66 | 8,965 | 79,201 |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Shares to be issued - | - | - | 13 | - | 13 |
| Options | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Total comprehensive income | - | - | - | (1,304) | (1,304) |
| for the period | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Balances as at 30 June | 1,300 | 68,870 | 79 | 7,661 | 77,910 |
| 2008 | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Balance at 1 January 2009 | 1,300 | 68,870 | 73 | 7,331 | 77,574 |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Shares to be issued - | - | - | 10 | - | 10 |
| Options | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Total comprehensive income | - | - | - | (2,178) | (2,178) |
| for the period | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
| Balances as at 30 June | 1,300 | 68,870 | 83 | 5,153 | 75,406 |
| 2009 | | | | | |
+----------------------------+----------+----------+------------+----------+----------+
STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDING 30 JUNE 2009 (UNAUDITIED)
+---------------------------------------------+--+--+------+------------------+--+------------------------+
| | | 6 | | 6 |
| | | months | | months |
| | | to 30 | | to 30 |
| | | June | | June |
| | | 2009 | | 2008 |
+------------------------------------------------+---------+------------------+--+------------------------+
| | | GBP'000s | | GBP'000s |
+------------------------------------------------+---------+------------------+--+------------------------+
| CASH FLOW FROM OPERATING ACTIVITIES | | | |
+----------------------------------------------------------+------------------+--+------------------------+
| Loss for the | | (1,194) | | (1,588) |
| period before | | | | |
| taxation | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Adjusted for: | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Finance costs | | 944 | | 1,407 |
+---------------------------------------------------+------+------------------+--+------------------------+
| Finance income | | (264) | | (106) |
+---------------------------------------------------+------+------------------+--+------------------------+
| IAS 19 cost/(income) | | 9 | | (157) |
+---------------------------------------------------+------+------------------+--+------------------------+
| Depreciation of property, plant & equipment | | 963 | | 895 |
+---------------------------------------------------+------+------------------+--+------------------------+
| Amortisation of | | 49 | | 47 |
| intangibles | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Share based | | 10 | | 13 |
| payment expense | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Release of provision | | (188) | | - |
+---------------------------------------------------+------+------------------+--+------------------------+
| Operating Cash Flow | | 329 | | 511 |
+---------------------------------------------------+------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Decrease/(Increase) | | 667 | | (2,617) |
| in inventories | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Decrease in | | 850 | | 35 |
| receivables | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| (Decrease)/Increase | | (592) | | 2,430 |
| in payables | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Cash generated from operations | | 1,254 | | 359 |
+---------------------------------------------------+------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Income taxes | | 295 | | (696) |
| received/(paid) | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Interest paid | | (1,045) | | (1,130) |
+---------------------------------------------------+------+------------------+--+------------------------+
| Net cash from operating activities | | 504 | | (1,467) |
+---------------------------------------------------+------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| CASH FLOW FROM INVESTING ACTIVITIES | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Interest received | | - | | 100 |
+---------------------------------------------------+------+------------------+--+------------------------+
| Income tax paid on | | - | | (2,919) |
| disposal of | | | | |
| division | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Purchase of | | - | | (87) |
| intangible assets | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Purchase of | | (222) | | (944) |
| property, plant & | | | | |
| equipment | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Net cash used in investing activities | | (222) | | (3,850) |
+---------------------------------------------------+------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| CASH FLOW USED IN FINANCING ACTIVITIES | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Drawdown/(Repayment) | | 604 | | (812) |
| of borrowings | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| Repayment of | | (142) | | (129) |
| obligations under | | | | |
| finance leases | | | | |
+---------------------------------------------------+------+------------------+--+------------------------+
| | | | | |
+------------------------------------------------+---------+------------------+--+------------------------+
| Net cash used in financing activities | | 462 | | (941) |
+---------------------------------------------+------------+------------------+--+------------------------+
| NET INCREASE/(DECREASE) IN CASH AND CASH | | 744 | | (6,258) |
| EQUIVALENTS | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| CASH AND CASH EQUIVALENTS | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| Cash and cash equivalents at beginning of | | 1,464 | | 10,785 |
| year | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| Net movement in cash and cash equivalents | | 744 | | (6,258) |
+---------------------------------------------+------------+------------------+--+------------------------+
| | |
+---------------------------------------------+------------+
| Cash and cash equivalents at balance | | 2,208 | | 4,527 |
| sheet date | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| Cash and cash equivalents comprise: | | | | |
+---------------------------------------------+------------+------------------+--+------------------------+
| Cash | | 2,208 | | 7,769 |
+---------------------------------------------+------------+------------------+--+------------------------+
| Overdrafts | | - | | (3,242) |
+---------------------------------------------+------------+------------------+--+------------------------+
| | | 2,208 | | 4,527 |
+---------------------------------------------+--+--+------+------------------+--+------------------------+
NOTES TO THE INTERIM RESULTS
1. GENERAL INFORMATION
The Real Good Food Company Plc is a public limited company ("company")
incorporated in the United Kingdom under the Companies Act 1985 (registration
number 4666282). The Company is domiciled in the United Kingdom and its
registered address is 229 Crown Street Liverpool Merseyside L8 7RF. The
Company's shares are traded on the Alternative Investment Market ("AIM").
The principal activities of the Group are the sourcing, manufacture, marketing
and distribution of food and industrial ingredients.
Copies of the interim report are being sent to shareholders. Further copies of
the interim report and Annual Report and Accounts may be obtained from the
address above.
2. BASIS OF PREPARATION
These consolidated financial statements are presented on the basis of
International Financial Reporting Standards (IFRS) as adopted by the European
Union and interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) and have been prepared in accordance with AIM
rules and the Companies Act 1985, as applicable to companies reporting under
IFRS.
The financial information set out in this document does not comprise of the
statutory accounts of the Company within the meaning of section 240(5) of the
Companies Act 1985.
New IFRS standards and interpretations not adopted
The following IFRS standards, amendments and interpretations are not yet
effective and have not been adopted early by the Group:
* Revised IAS 27 Consolidated and Separate Financial Statements (effective 1 July
2009)
* IFRS 3 (revised) Business Combinations (effective 1 July 2009)
* IAS 32 Financial Instruments - Presentation (Amendments)
* IAS 23 Borrowing Costs
* IAS 27 Consolidated and Separate Financial Statements (effective 1 July 2009)
* IAS 39 Financial Instruments: Recognition and Measurement (Amendment): Eligible
Hedged Items
The adoption of these standards, amendments and interpretations is not expected
to have a material impact on the Group's loss for the period or equity. The
adoptions may affect disclosures in the Group's financial statements.
3. SIGNIFICANT ITEMS
It is the company's policy to show items that it considers being of a
significant nature seperately on the face of the Consolidated Statement of
Comprehensive Income in order to assist the reader to understand the accounts.
The company defines the term significant as items that are material in respect
to their size and nature. For example a major restructuring of the activities of
the Group. Summary details of significant items are shown in the Chairman's
statement which forms part of this half yearly financial report.
4. SEGMENT ANALYSIS
Business segments
The Group's operating segments are Sugar, Bakery Ingredients and Bakery as the
Group's management and reporting structure is set out along these lines.
The following table shows the Group's revenue and results for the period under
review analysed by operating segment. Segment profit represents the trading
profit after depreciation but before any interest and significant items.
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Six months to 30 June 2009 | Bakery | Bakery | Total Before | Significant | Total After |
| | Ingredients | | Significant | Items | Significant |
| | | | Items | | Items |
+---------------------------------------------+ + + + + +
| | | | | | | Sugar |
+----------------------------------+--------------+----------+--------------+ +-------------+----------+
| | GBP000s | GBP000s | GBP000s | | GBP000s | GBP000s |
+----------------------------------+----------+--------------+----------+-------------+--------------+-------------+
| | | | | | | |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Total revenue | 82,113 | 14,837 | 9,575 | 106,525 | - | 106,525 |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Revenue - internal | (3,968) | (860) | - | (4,828) | - | (4,828) |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| | | | | | | |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| External Revenue | 78,145 | 13,977 | 9,575 | 101,697 | - | 101,697 |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| | | | | | | |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Operating Profit/(Loss) | 218 | 188 | (198) | 208 | (84) | 124 |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| | | | | | | |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Finance costs (net of interest received) | | | (680) | - | (680) |
+---------------------------------------------+--------------+----------+--------------+-------------+-------------+
| Pension finance costs | | | (9) | - | (9) |
+---------------------------------------------+--------------+----------+--------------+-------------+-------------+
| Head office and consolidated adjustments | | | (629) | - | (629) |
+---------------------------------------------+--------------+----------+--------------+-------------+-------------+
| | | (1,110) | (84) | (1,194) |
| Loss before tax | | | | |
| | | | | |
+------------------------------------------------------------+----------+--------------+-------------+-------------+
| Tax | | | | 281 | 24 | 305 |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| | | | | | | |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
| Loss after tax as per income statement | | (829) | (60) | (889) |
+----------------------------------+----------+--------------+----------+--------------+-------------+-------------+
Inter-segment sales are charged at prevailing market rates.
The Group operates a central function; therefore finance costs cannot be
meaningfully allocated to individual operating segment.
5. SEGMENT REPORTING (continued)
+---------------------------+----------+-------------+----------+-------------+------------+
| As | Sugar | Bakery | Bakery | Unallocated | Total |
| At | | Ingredients | | | Group |
| 30 | | | | | |
| June | | | | | |
| 2009 | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| | GBP'000s | GBP'000s | GBP'000s | GBP'000s | GBP'000s |
+---------------------------+----------+-------------+----------+-------------+------------+
| Segment assets | 27,916 | 18,841 | 5,114 | | 51,871 |
+---------------------------+----------+-------------+----------+-------------+------------+
| Unallocated assets | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Goodwill | | | | | 75,796 |
+---------------------------+----------+-------------+----------+-------------+------------+
| Other intangible | | | | | 3 |
| assets | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Property, | | | | | 13 |
| plant and | | | | | |
| equipment | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Deferred tax | | | | | 1,600 |
| assets | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Inventory | | | | | (26) |
+---------------------------+----------+-------------+----------+-------------+------------+
| Trade and other | | | | | 515 |
| receivables | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Derived financial | | | | | 25 |
| assets | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Current tax assets | | | | | 574 |
+---------------------------+----------+-------------+----------+-------------+------------+
| Cash and cash | | | | | 165 |
| equivalents | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Total assets | | | | | 130,536 |
+---------------------------+----------+-------------+----------+-------------+------------+
| | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Segment liabilities | (26,919) | (7,539) | (3,156) | | (37,614) |
+---------------------------+----------+-------------+----------+-------------+------------+
| Unallocated | | | | | |
| liabilities | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Trade and other | | | | | (489) |
| payables | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Borrowings | | | | | (14,294) |
+---------------------------+----------+-------------+----------+-------------+------------+
| Derived | | | | | (160) |
| financial | | | | | |
| instruments | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Current tax | | | | | (188) |
| liabilities | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Deferred tax | | | | | (2,209) |
| liabilities | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Provisions | | | | | (176) |
+---------------------------+----------+-------------+----------+-------------+------------+
| | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Total liabilities | | | | | (55,130) |
+---------------------------+----------+-------------+----------+-------------+------------+
| | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Net operating assets | 997 | 11,302 | 1,958 | | 75,406 |
+---------------------------+----------+-------------+----------+-------------+------------+
| | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Non current asset | 31 | 158 | 33 | - | 222 |
| additions | | | | | |
+---------------------------+----------+-------------+----------+-------------+------------+
| Depreciation | 308 | 327 | 325 | 3 | 963 |
+---------------------------+----------+-------------+----------+-------------+------------+
| Amortisation | (6) | 37 | 17 | 1 | 49 |
+---------------------------+----------+-------------+----------+-------------+------------+
Geographical segments
The Group earns revenue from countries outside the United Kingdom, but as these
only represent 2.6% of the total revenue of the Group, segmental reporting of a
geographical nature is not considered relevant.
6. EARNINGS PER ORDINARY SHARE
Earnings per share is calculated on the basis of the loss for the period after
tax, divided by the weighted average number of shares in issue for 2009
of 65,014,348 (2008: 65,014,348).
Diluted loss per share is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all potential dilutive
ordinary shares. Potential dilutive ordinary shares arise from share options and
warrants. For these, a calculation is performed to determine the number of
shares that could have been acquired at fair value (determined as the average
annual market share price of the Company's shares) based on the monetary value
of the exercise price attached to outstanding share options. Thus the dilutive
weighted average number of shares considers the number of shares that would have
been issued assuming the exercise of the share options.
An adjusted loss per share and a diluted adjusted loss per share, which exclude
significant items, has also been calculated as in the opinion of the Board this
will allow shareholders to gain a clearer understanding of the trading
performance of the Group.
+--------+--------------+--------+----------+------------+--------+--------------+----------+------------+---------+
| | | | Six months to 30 June 2009 | | Six months to 30 June 2008 |
+--------+--------------+--------+--------------------------------+--------------+---------------------------------+
| | | |Earnings | Weighted | Per | |Earnings | Weighted | Per |
| | | | | Average | share | |GBP'000s | Average | share |
| | | |GBP'000s | No. |amount | | | No. of | amount |
| | | | | of | pence | | | shares | pence |
| | | | | shares | | | | | |
+--------+--------------+--------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | | |
+-----------------------+--------+----------+------------+--------+--------------+----------+------------+---------+
| Loss attributable to | | (889) |65,014,348 | (1.4) | | (1,159) |65,014,348 | (1.8) |
| ordinary shareholders | | | | | | | | |
+ +--------+ + + +--------------+ + + +
| | | | | | | | | |
+-----------------------+--------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Significant items | 60 | - | - | | 955 | - | - |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Adjusted Loss per share | (829) |65,014,348 | (1.3) | | (204) |65,014,348 | (0.3) |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Dilutive effect of options | - | - | - | | - | - | - |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Dilutive effect of warrants | - | - | - | | - | - | - |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Diluted loss per share | (889) |65,014,348 | (1.4) | | (1,159) |65,014,348 | (1.8) |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| Diluted adjusted loss per | (829) |65,014,348 | (1.3) | | (204) |65,014,348 | (0.3) |
| share | | | | | | | |
+--------------------------------+----------+------------+--------+--------------+----------+------------+---------+
| | | | | | | | |
+--------+--------------+--------+----------+------------+--------+--------------+----------+------------+---------+
7. DIVIDENDS
No dividend is proposed for the six months ended 30 June 2009 (2008 Nil).
8. TAXATION
The charge for taxation is based on the results for the period and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes.
Provision is made in full for taxation deferred in respect of timing differences
that have originated but not reversed by the balance sheet date, except for
gains on disposal of fixed assets which will be rolled over into replacement
assets. No provision is made for taxation on permanent differences. Deferred tax
is not discounted.
Deferred tax assets are recognised to the extent that it is more likely than not
that they will be recovered.
9. PENSION ARRANGEMENTS
A subsidiary of the Group, Napier Brown & Company Limited, operates a defined
benefit pension scheme, the Napier Brown Retirement Benefits Scheme. The assets
of the scheme are held separately from those of the Group in an independently
administered fund. The contributions made by the employer over the six-month
period have been GBP48,870.
Assumptions
The assets of the scheme have been taken at market value and the liabilities
have been calculated using the following principal actuarial assumptions:
+--------------------------------------+-----------------+--------------------+
| | 30 | 31 |
| | June | December |
| | 2009 | 2008 |
| | % | % per |
| | per | annum |
| | annum | |
+--------------------------------------+-----------------+--------------------+
| Rate of increase in | 3.60 | 3.10 |
| pensions in payment | | |
+--------------------------------------+-----------------+--------------------+
| Discount rate | 6.10 | 6.30 |
+--------------------------------------+-----------------+--------------------+
| Inflation assumption | 3.60 | 3.10 |
+--------------------------------------+-----------------+--------------------+
| Revaluation rate for | 3.60 | 3.10 |
| deferred pensions | | |
+--------------------------------------+-----------------+--------------------+
The fair value of the assets in the scheme, the present value of the liabilities
in the scheme and the expected rate of return at each balance sheet date were:
+--------------------------------------+----------------+--------------------+
| | 30 | 31 |
| | June | December |
| | 2008 | 2008 |
| | % | % |
+--------------------------------------+----------------+--------------------+
| Equities | 6.90 | 6.90 |
+--------------------------------------+----------------+--------------------+
| Bonds | 5.64 | 5.64 |
+--------------------------------------+----------------+--------------------+
| Property | 5.90 | 5.90 |
+--------------------------------------+----------------+--------------------+
| Cash | 3.50 | 3.50 |
+--------------------------------------+----------------+--------------------+
+--------------------------------------+--------------------+--------------------+
| | 30 | 31 |
| | June | December |
| | 2009 | 2008 |
| | GBP'000s | GBP'000s |
+--------------------------------------+--------------------+--------------------+
| Total fair value of assets | 14,068 | 14,830 |
+--------------------------------------+--------------------+--------------------+
| Present value of scheme | (16,063) | (15,094) |
| liabilities | | |
+--------------------------------------+--------------------+--------------------+
| Deficit in the scheme | (1,995) | (264) |
+--------------------------------------+--------------------+--------------------+
The scheme is a closed scheme and therefore under the projected unit method the
current service cost would be expected to increase as the members of the scheme
approach retirement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKFKNPBKDCCB
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