The Real Good Food Company (LON:RGD) rode out a tricky year and still managed to increase pre-tax profits and earnings per share.
A shake-up in European Union pricing structures made it difficult for the group, with a reduced EU intervention price for sugar causing a 7 percent drop in total group sales from £215.6 million last year to £200.1 million in 2010.
The group’s earnings (EBITDA) were in line with the previous year at £5.6 million (FY09: £5.6 million). Pre-tax profit was up from £2.15 million to £2.34 million and earnings per share increased by one penny from 1.3 to 2.3 pence. It also cut debt from £24.1 million to £22.6 million.
For the Napier Brown sugar business - a non-refining distributor, which contributed £108.4 million or 54 percent of group revenue - it was the ‘toughest year ever’ in terms of margin as prices had dropped by around 28 percent from the 2008 levels.
However, it benefitted from an improved October 2010 crop harvest which gave better volumes and margins in the second half. The company also stressed that it has been a transitional year for the sugar business which it has adopted a multi-sourcing plan and it has restructured its businesses.
Meanwhile other parts of the group had a better time in 2010.
The Renshaw unit performed ahead of expectations in a record 2010. It upped sales by 13 percent to £43 million – around 21.3 percent of group revenue – putting it ‘significantly ahead’ of its three year growth plan.
The Garrett Ingredients business – which contributed around £25.5 million, or 12.7 percent of revenue - made a significant recovery during the year. As it was re-launched, under its original name, it grew both sales and margin.
At Haydens bakery it reported a steady and seamless continuation of the restructuring plans. Overall Haydens sales were up by 10 percent and specifically its dessert range achieved notable growth, about 20 percent. The unit contributed 23.3 million, about 11.6 percent, of group revenue.
"All four businesses have made substantial progress during the year,” said chairman Pieter Totté.
He added: “The businesses are all at exciting stages of their development and are well resourced with strong management teams who are focused on delivering the next phase of our growth plans. As such the group is well placed to deliver further improvements in sales and profitability.”