Real Good Food rises on strong performance

Real Good Food has seen a continued improvement in its earnings before interest, taxes, depreciation, and amortization (EBITDA) performance, compared to 2010, since 1 July to date, the firm said.

Stock levels have been falling during the fourth quarter following easing of the problems in the sugar supply chain. Mean,while upward pressure on working capital is said to have eased, resulting in borrowings being reduced over the period.

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The 2011/12 Sugar Contract season has gone well, the firm said, with over 90% now contracted.

However, modernisation of the Haydens Bakeries plant is running about six months behind schedule, but the firm was keen to emphasise that in November it took the first step in a major reorganisation of shift patterns and will be introducing improved production cycles in the first quarter of 2012, which it expects to have a major impact on performance.

Executive chairman Pieter Tott said: "Whilst we are still only midway through the key Christmas trading period, I am pleased with the progress we have made so far, both in terms of our financial performance this year against last year, and the good progress being made with all the strategic initiatives for each of our businesses."

"Earlier this year we announced that the group was changing its accounting reference date from 31 December to 31 March, in order to better align its reporting to the markets with the seasonality of our business. As the October to December quarter accounts for around 50% of our annual profitability it makes more sense to have this period behind us when preparing annual budgets and projections."

The share price rose 4.32% to 36.25p by 14:16.

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