The UK’s Real Good Food has issued a profit warning after the auditing of its annual accounts revealed issues about sugar contracts.
The company, which had been due to report the financial results for the year to the end of March last month, said today (1 August) “two substantial anticipated claims regarding its sugar purchase arrangements have not yet materialised”, meaning it will not meet its previously forecasted profit figures.
In a stock exchange filing, Real Good Food also said its board had concluded certain development costs, which had been previously capitalised in fiscal 2017, should have been expensed. The board expects these adjustments and further accrued expenses to reduce EBITDA to around GBP2m (US$2.6m), subject to a final audit.
Real Good Food, which has operations in bakery, ingredients and cake decoration said in June it expected to report annual EBITDA of between GBP5m and GBP5.4m. In Real Good Food’s previous financial year, it generated EBITDA of GBP5m.
It is now undertaking a re-forecasting exercise for the year ending March 2018, it said.
The management board also said certain payments made to some directors for consultancy services have not been separately disclosed in the related party transaction notes to its previously published annual report and accounts for the years 2014, 2015, and 2016, it said. The figures will have no impact on the reported results for those years as the costs were fully accounted for in the relevant periods, it noted.
The company said it now expects to report its annual results at the end of August. Shares in Real Good Food were down 38.86% at 21.4p at 08:51 BST today.