Real Good Food forecasts lower profits

In a trading update, the AIM-listed food manufacturer said the continued deterioration in the economic climate had affected all its trading divisions to varying degrees. As part of a series of cost reduction initiatives, the company said it was relocating its London head office to its Liverpool manufacturing site. CEO Stephen Heslop (pictured) said revenues at the sugar division, Napier Brown Foods, had suffered from reduced sales to the industrial sector and it now expected revenues to be between 7% and 9% behind last year. He went on: "Margins have seen a recovery in the industrial sector, from the lows seen in quarter three. Whilst this is very encouraging and points to a longer-term recovery in profits, the retail market has become very competitive and this is adversely affecting our overall position.” At Renshaw, the bakery ingredients division, performance was in line with expectations, with the trend towards increased home baking helping sales into retailers and ofsetting reducing volumes to the manufacturing sector. The bakery division itself, Haydens Bakeries, incurred one-off costs in developing new foodservice lines and sales to the group’s two main retail customers continued to reflect their reduced trading. "Taking all these factors into account, the Group now expects that its results for the year to 31 December will show a profit before taxation of around £0.5m,” said Heslop.