24 July 2009 - The Real Good Food Company plc, is a supplier of sugars and bakery ingredients and a manufacturer of bakery products. To coincide with its Annual General Meeting, being held in Liverpool at 10.00 a.m. today, the Group is making the following comments on trading during the six months to 30 June 2009. Interim Results for this period will be published in late September.
The first six months of the current financial year have seen some stability returning to the markets in which the Group operates, after a long period in which it has faced very challenging trading conditions. In particular, changes to the EU sugar regime, and a reduction in the EU sugar production quota, have helped move the sugar market into balance with some fluidity in pricing as the industry wrestles with the challenges of enhancing margins in a falling market.
Merger of the sugar and bakery ingredients businesses to form Renshawnapier has gone well and according to plan. A new operating Board has been established and operational and commercial structures re-aligned with the revised business model. Sugar volumes continue at the lower levels witnessed since last summer, as continued economic pressure restricts sales. Conversely, export sales of sugar pastes have seen a tremendous growth, with volumes up 40%.
Margins in the first half of the year at Renshawnapier have, not unexpectedly, been below that of the prior year, although some improvements have been seen in the second quarter. The benefits of the recent restructure are beginning to flow in terms of overhead savings.
At Hayden's, the Group's Bakery Division, new sales to a food service customer, combined with promotional volumes, have aided revenues, which are 12% up on the prior year. Price increases have been secured in the second quarter and this has had a positive effect on margins, while raw material controls are much improved and this is also aiding some margin recovery.
Stephen Heslop, C.E.O., comments:
"The merger of the two principal pillars of the Group to form Renshawnapier has gone well and according to plan. This new division is performing in line with expectations, although behind the prior year, while Hayden's is performing in line with expectations and up on the prior year. The Board is pleased with the progress the Group has made in the first six months of 2009."