The Real Good Food Company today (16 January) forecast a 31% rise in 2006 underlying profits, as its frozen fish, bakery ingredients and sugar units helped offset a shortfall in the performance of its baking division.
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“Performance in our Bakery Division (Haydens) has fallen short of expected levels due to cost overruns associated with new customer and product introductions, impacting upon the group’s full year out-turn,” the group said in a statement to the London Stock Exchange.
RGFC said that Napier Brown Foods, its sugar business, performed steadily throughout the year in spite of challenging conditions in the EU sugar marketplace. Five Star Fish, the company’s frozen fish unit, increased sales volumes by 7%. In its first full-year under RGFC ownership Renshaw’s baking ingredients performance was in line with expectations, with sales rising 2%.
Despite a 6% increase in sales at the bakery division, profits were hit by increased labour and overhead costs. A number of new customers came on stream this year, the company said, adding that the costs of servicing this activity significantly exceeded forecasts.
“In light of the above factors, we now expect the normalised profit before exceptional items for the group for 2006 to be approximately GBP9.3m (US$18.24m),” RGFC said.
