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October 10, 2013

UK: Real Good Food Co.’s Napier Brown signs supply deals

Napier Brown, the sugar trading subsidiary of The Real Good Food Co., has signed two "major" UK supply contracts for its Whitworths sugars range.

Napier Brown, the sugar trading subsidiary of The Real Good Food Co., has signed two “major” UK supply contracts for its Whitworths sugars range.

Sugar-to-ingredients group The Real Good Food Co. (RGFC) said the deals with Asda and wholesaler Booker Group will include the supply of around 60 product lines, including the Whitworths for Baking range, in addition to product lines targeting “specific consumer needs”.

The contracts will begin later this month, the company said, and around 80 jobs will be created at the Napier Brown headquarters in Normanton, West Yorkshire.

RGFC said Whitworths sugar has become “the fastest growing brand in the sugar category” following a relaunch of the brand last year and the introduction of the Whitworths for Baking range last year. The agreements with Asda and Booker are expected to result in a doubling in the retail value of Whitworths’ sugar sales, the firm said.

“I am delighted by the success of John Tanner and his team at Napier Brown in securing these important new contracts, which represents the culmination of 18 months’ hard work,” said RGFC chairman Pieter Totté. “We look forward to building our relationships with both Asda and Booker and believe that the Whitworths brand still has huge growth potential.”

Shore Capital analyst Phil Carroll said the stockbroker was leaving its earnings forecast for the company “unchanged” ahead of the firm’s upcoming interim results. 

The company is due to release its first-half results at by early December.

“RGFC shares are currently trading on what we believe is an undemanding valuation on a FY2014F PER of 6.8x and an EV/EBITDA ratio of 4.9x,” Carroll said.

In its full-year in June, RGFC booked a jump in earnings accompanied by a “modest” increase in revenue.

Click here to read a recent interview with Totté who spoke to just-food about his confidence in the business for the future, and the group’s plans for Europe and the US.

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