The board of The Real Good Food Company has indicated that sugar division Napier Brown Foods is running behind expectations due to the volatile nature of the sugar market.
The company announced, at yesterday’s (23 May) AGM, that sugar volumes have been below both last year and forecast levels – mainly due to competitive price pressure.
Napier has seen an improvement in volumes since the end of March, but a deterioration in margin remains.
It has maintained share in premium sectors and, following capital expenditure, expects to see volume growth from added value products. Shortfalls in volume have been restricted to the bulk industrial sector, where margins have become particularly thin.
The company said the competitive marketplace stems predominantly from the decision to delay the implementation of the new Sugar Regime.
Trading remained in line with Real Good Food’s expectations for its Five Star Fish subsidiary, with sales 15% ahead of last year, while the company’s baking ingredients division, Renshaw, is confident of meeting the challenges of re-invigorating the business, saying: “A wide range of new customer wins have been achieved and there are more to come”. In the group’s bakery division, including Hayden’s Bakeries and Seriously Scrumptious, sales were 4% up on last year with increased sales to Marks & Spencer reported.
“Whilst the impact of the competitive market in sugar on the anticipated profitability of Napier Brown Foods is very disappointing and will lead to a significant reduction in group profitability against our previous estimates, our other businesses are on track to achieve results in line with expectations,” the company added.