RGD Real Good Food Plc

 

TIDMRGD 
 
RNS Number : 0966G 
Real Good Food Company Plc (The) 
26 January 2010 
 

The Real Good Food Company plc (AIM: RGD) 
 
 
 
 
Pre-Close Trading Update 
 
 
The Real Good Food Company plc ("Real Good Food" or "the Group"), is a supplier 
of sugars and bakery ingredients and a manufacturer of bakery products. 
 
 
The past year has seen the Group make considerable progress in addressing key 
operational and financial challenges. Under the guidance of a new senior 
management team, Real Good Food has managed to significantly reduce its bank 
borrowings from GBP29.1m to GBP21.3m at the period end, and improved its sales 
performance in retail sugar, baking ingredients and at its bakery division, 
Hayden's. 
 
 
Following significant investments in new capacity and automation over the past 
three years, retail sales of sugar hit record levels in 2009, driven by 
increased market share and development of the discounter sector and pushed 
factory utilisation to some 65%, on a 24/7 shift basis, for the year. This was 
helped by several new contracts, and growth in the home-baking market. 
 
 
Sugar sales to small industrial customers increased strongly in the second half 
of 2009 and the launch of a new Whitworths 25kg Pure Cane Sugar product this 
month is designed to build on this progress, with further investment in 
flexibility of pack format planned for 2010 to promote growth in the medium 
term. In addition, the business also continues to develop its added value 
sugars, sourcing a range of specialist, organic and fair trade products for both 
retail and industrial customers. 
 
 
Bulk sugar sales reduced slightly as a result of market weakness, following the 
final phase of the EU Sugar Regime changes in October. However, a number of new 
bulk sugar contracts have already been gained for 2010. 
2009 saw a resurgence of home baking and crafting, driving growth in both export 
and domestic markets, helping the ingredients business successfully recover and 
mitigating key commodity cost increases. A company-wide Innovations team has 
been established to increase both focus on research to understand consumers and 
to drive investment in product development and innovation. 
 
 
Hayden's, the Group's Bakery Division, achieved significant growth in sales to 
all three of its major customers - Marks & Spencer, Waitrose and Costa Coffee. 
Overall sales increased by 15%, with double-digit growth achieved at all major 
customers. Food service sales, which only started in 2008, grew to account for 
almost 10% of total revenues. 
 
 
A successful new product development programme at Hayden's led to the launching 
and re-launching of 29 products during the key launch window in October. Mince 
pie sales for Christmas reached record levels with over 1.5 million pies 
produced for the festive period (64% up on 2008). The management team, led by 
Managing Director, Paul Smith, is now overseeing a major investment in the 
business to double its size over the next four years. 
 
 
As a result of this strong progress at all its business units, the Group expects 
to report profits before taxation and exceptional items for the year ended 31 
December 2009, which are around 25% above current market expectations. Real Good 
Food expects to announce its preliminary results in mid-March. 
 
 
Pieter Totté, Executive Chairman, comments: 
 
 
"I am delighted by the progress we have made over the past year in developing 
new sales, expanding our product ranges and broadening our customer base. After 
a strong start to the current year, it gives me confidence that we are well 
placed to build on this progress." 
 
 
26 January 2010 
 
 
 
 
 
ENQUIRIES: 
 
 
+----------------------------------------------+----------------------------+ 
| The Real Good Food Company plc               | Tel: 0151 706 8200         | 
+----------------------------------------------+----------------------------+ 
| Pieter Totté, Executive Chairman             |                            | 
+----------------------------------------------+----------------------------+ 
| Mike McDonough, Finance Director             |                            | 
+----------------------------------------------+----------------------------+ 
|                                              |                            | 
+----------------------------------------------+----------------------------+ 
| Shore Capital                                | Tel: 020 7408 4090         | 
+----------------------------------------------+----------------------------+ 
| Guy Peters                                   |                            | 
+----------------------------------------------+----------------------------+ 
|                                              |                            | 
+----------------------------------------------+----------------------------+ 
| College Hill                                 | Tel: 020 7457 2020         | 
+----------------------------------------------+----------------------------+ 
| Gareth David                                 |                            | 
+----------------------------------------------+----------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 TSTUVUBRRAAAUAR 
 

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