UK bakery ingredients producer The Real Good Food Company posted a slide in full-year profits and sales today (9 June), hurt by “difficult” trading conditions, an upheaval in European sugar markets and reorganisation costs.
The firm made a pre-tax loss of GBP421,000 (US$679,551) for the year to 31 December compared with a GBP3.45m profit in the previous year.
Total group sales for the year also dropped, falling 5.4% to GBP218.7m, principally due to a 7% fall in revenues from the company’s sugar division.
Operating profit dropped to GBP1.6m from GBP7.4m in the comparable period of the previous year.
Sugar revenues were down 7% due to reduced industrial sales, especially within the first half of the year and falling sugar prices relating to the sugar regime changes. Price reductions were partially offset by the stronger euro, which increased both revenue and cost of sales equally.
Despite this, sales in the firm’s bakery ingredients division rose by 9.2% to GBP35m.
Chairman Pieter Totte said: “During the course of 2008, we continued to experience very difficult trading conditions, which deteriorated more significantly in the final quarter. Margins were continually under pressure from raw materials, fuel inflation and a very competitive market place.”
The board today announced that CFO Lee Camfield has resigned from the group. He will be replaced by Michael McDonough, who has been with the business since 1989 and is currently commercial finance director.
The board said it expects that the benefits of its restructuring programme and lower interest rate charges during the financial year should be reflected in an “improved financial performance” over the prior year.