Food manufacturing business specialising in cake decoration Real Good Food has released ts half year results as of September 2022, announcing a decrease of revenue by 20%.
The news comes after the company announced managing to secure additional funding following on from the company’s acknowledgement of “challenging” trading conditions owing to the war in Ukraine, supply shortages, skyrocketing inflations and “erratic” deliveries of key ingredients; as the cost of sugar has doubled and costs overall are 30% higher, according to the company.
The company has managed to pass cost increases to customers which resulted in revenues 20% lower compared with last year.
In the half year results the company reported a decrease in revenue of 20.1%, from UK£15.9 million to £19.9 million which the company has attributed to “macroeconomic headwinds”, although it has announced an additional of £2.5 million in funding which was secured in November 2022 and will go towards investing in the company’s reform programme.
Noted by the company, the difficulty with sourcing key ingredients has negatively impacted on company performance although it has said this has “eased” in recent weeks, although highlights centre on a radical reform programme which involves restructuring, with eliminating overhead costs and building stronger partnerships with key customers.
For the next year, Real Good Food has said it expects for market conditions to remain challenging in the short term, but the reform programme is underway and is expected to deliver EBITDA of between £2 million and £4 million for 2024.
“Market conditions have been very challenging over the last twelve months, and show no sign of easing in the near-term, due to a perfect storm of rising costs and lower revenues. The Group is not just hunkering down, it has put into effect a radical programme of reform to return it to profitability and to ensure that profits will be sustainable,” explained Mike Holt, Executive Chairman of Real Good Food.
“New funding has been secured to provide the headroom to make these transformational changes. The Board is confident that the right actions are being taken and that they will deliver positive returns. The simple truth, a crisis was needed to enable the required changes to be possible,” he added.
Read more latest industry news and developments in our free to download magazine.