• "Encouraging" Q4
  • Forecast 24% FY EBITDA growth
RGFC upbeat on FY earnings outlook

RGFC upbeat on FY earnings outlook

The Real Good Food company has said that after a "challenging" third-quarter, it has seen some signs of improved performance in the last three months of the fiscal year.

In a trading update, the bakery-to-sugar group said the group has seen a "large positive swing in EBITDA" due to a stronger performance from its Napier Brown sugar business and improved trading at its bakery ingredients unit Renshaw.

RGFC is forecasting EBITDA of GBP10.5m (US$15.9m) in the 12 months to end-March, which represents a year-on-year increase of around 24%.

RGFC is scheduled to report its full-year results in June.

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The Real Good Food Company plc (AIM: RGD)

Trading Update

The Real Good Food Company plc ("the Group" or "RGFC"), the diversified food group, owns Napier Brown (Europe's biggest non-refining sugar distributor) as well as Renshaw and R&W Scott (bakery ingredients), Garrett Ingredients (dairy ingredients) and Haydens Bakery (patisserie and desserts).

As promised in its 31 January update, the Group is commenting further on its trading position for the 12 months ending 31 March 2013.

Following the difficult October to December quarter (Q3), the months of January to March 2013 (Q4) have been encouraging. In Q4, year-on-year, the group has seen a large positive swing in EBITDA, due to a stronger sugar trading quarter, combined with the turnarounds achieved at Haydens and R&W Scott, as well as improved trading in Renshaw.


The Group is forecasting an EBITDA in the region of £10.5 million for the 12 months to 31 March 2013, which would represent a significant increase of approximately 24% over the corresponding 12 months to 31 March 2012 of £8.5 million.

Net Debt

The Net Debt position at the end of March is expected to be in the region of £27 million (£17.8 million of which is current), which would represent a significant reduction on the last reported figure for 30 September 2012 of £32.1 million and a material improvement, i.e. reduction, in the EBITDA to Net Debt ratio from 3.3 for the 12 months to 31 March 2012 to 2.6 for the 12 months to 31 March 2013, based on the above figures. £17.8 million of the Net Debt is current, primarily Invoice discounting and Stock financing, with the balance of £9.2 million being repayable over the following five years.

Quarter 4

The Group's current trading levels are healthy, driven by improvements across the five business units and turnover in the quarter is expected to be around £65 million, compared to £56 million in Q4 2012. EBITDA in Q4 is expected to be £3.9 million, compared to EBITDA for Q4 2012 of £0.1 million, with all businesses making a contribution to this improvement.


As previously reported we are now operating with our new five year term financing arrangement with PNC Financial Services UK Ltd, extending the successful partnership we have enjoyed since 2008. The terms are improved, with overall facilities increased by 25% to £50 million, increasing headroom accordingly and providing the capacity we need to support our growth plans. We are also pleased to confirm that Lloyds TSB is providing all our day to day clearing and ancillary facilities. In a difficult market the board is extremely pleased the confidence this demonstrates in our business.

Pieter Totté, Executive Chairman, states:
"As I commented in January, the changes we have made in the Group have produced positive results and these are now beginning to show through, as demonstrated by our Q4 results. In line with the rest of the food sector, I believe that 2013 will be a challenging year, but I am confident that we are in a strong position to achieve our goals for this year and remain on course to achieve my longer term vision for the Group."

20 March 2013

The Group intends to release its preliminary results for the 12 months ending 31 March 2013 in late June 2013, with full accounts being published in mid-July.


Original source: The Real Good Food Company