Real Good Food plc has confirmed that overall sales continue to grow and were strong in Q3, up 8% year-on-year.
As highlighted at the time of interim results, the company makes the majority of is profits in the second half of the year, which includes the important Q3 trading period for Cake Decoration and Premium Bakery in particular in the run up to Christmas.
As widely reported elsewhere, the overall trading environment for food manufacturers remains difficult with the largest factors affecting Real Good Food being the short term impact of high commodity prices, especially butter, sugar and oils, all key ingredients for the group, and a weakening of sterling post Brexit.
The cost of butter in particular has more than doubled in price. The timing of these factors was unfortunate as it coincided with Q3 and has adversely impacted EBITDA margins. Notwithstanding this margin pressure, the Company remains confident that it will be reporting revenue and EBITDA for the full year in line with current market consensus.
In common with its competitors, Real Good Food, having examined all options to mitigate the impact, has now implemented targeted price increases and expects margins to be largely restored by the start of the next financial year.
Real Good Food is a diversified food business serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Group focuses on three main markets: Cake Decoration (Renshaw, Rainbow Dust Colours), Food Ingredients (Garrett Ingredients and R&W Scott) and Premium Bakery (Haydens and Chantilly Patisserie).