Real Good Food proposes delisting as sales fall, loss narrows

(Alliance News) - Real Good Food PLC on Tuesday said it plans delist from the AIM market to cut ...

Alliance News 21 September, 2021 | 11:01AM
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(Alliance News) - Real Good Food PLC on Tuesday said it plans delist from the AIM market to cut costs and reduce debt, after delivering a narrowed loss in its recent financial year.

Shares in the company were trading down 20% at 2.73 pence each in London on Tuesday.

Revenue totalled GBP37.3 million in the year ended March 31, down 10% from GBP41.2 million a year ago.

Nevertheless, the food manufacturer's pretax loss narrowed year-on-year to GBP6.1 million from GBP23.1 million as it reduced expenses and impairment charges.

Administrative expenses fell 21% to GBP14.3 million from GBP18.2 million. While the company reported impairment charges on goodwill or fixed assets of GBP12.6 million the year before, no such costs were registered in financial 2021.

Prior to the pandemic, Real Good Food reported a pretax loss of GBP26.1 million on revenue of GBP61.6 million in financial 2020.

Net debt stood at GBP48.8 million on March 31, compared to GBP45.4 million a year earlier. Most debts are shareholder loan notes, the company said, of which GBP15.2 million are convertible loan notes.

"The group shareholder debt remains significant; the debt, however, was reduced by GBP23.6 million following the sale of Brighter Foods, and the interest rates on the loans were reduced from January 1, 2021," the company added.

Real Good Food decided against paying a final dividend, in keeping with previous years. Instead, the company said it will focus on debt reduction and investment in its cake decoration businesses, JF Renshaw Ltd and Rainbow Dust Colours Ltd.

"The group has coped with the challenges of Covid and has continued to improve underlying profitability. In addition, the debt burden was halved following the successful sale of Brighter Foods. Renshaw and Rainbow Dust Colours, our two remaining businesses, continue to improve their performance, and after a good start to the year, prospects are encouraging," Executive Chair Mike Holt commented.

The company noted good retail and international sales in the first five months of its new financial year.

Revenue and profit remain in line with board expectations and ahead of financial 2020, the company added.

"The board remains focused on reviewing all initiatives to continue to improve the capital structure of the group; including the intention to delist the group from AIM to save costs and provide greater agility and flexibility to maximise shareholder value," the company added.

The move to delist Real Good Food's shares from the AIM market would save GBP150,000 annually, the company said.

"The volume of shares traded is very small and an AIM listing adds a disproportionate expense and burden on the company."

The company said it plans to propose the delisting at the its annual general meeting on October 20.

By Scarlett Butler; scarlettbutler@alliancenews.com

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Security Name Price Change (%) Morningstar
Rating
Real Good Food PLC 1.45 -

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