Food manufacturer, Real Good Food has reported a pretax loss of £18.9 million for the year to March 31 as the food and cake decoration sector suffer changing market conditions.
This comes following a £6.1 million pretax loss in 2021, despite the company’s £36.4 million deal which saw food product supplier, Brighter Foods sold to The Hut Group (THG) in May of the same year.
Speaking of the market condition, Real Good Food executive chairman, Mike Holt said in a letter to the London Stock Exchange that the “unprecedented increases in the cost of raw materials and energy in recent months continue unabated and pose significant challenges to the whole sector.”
Despite this, Real Good Food saw an increase in revenue up 8.3% to £40.4 million and has seen its net debt reduced from £48.8 million in 2021 to £25.5 million.
Discussing the company’s outlook, Holt said it was determined “to hunker down, control costs, maximise savings opportunities and protect revenues.”
However, the food manufacturer has said one way it will save £1.4 million each year is through 51 job cuts agreed on through its voluntary redundancy programme in May.
Speaking of the financial year, Holt said: “The Group made a good start to the year and expected to build on this during the seasonally busier second half of the year.
“Market conditions changed during Q3 and have remained extremely challenging as noted in our trading updates in April and earlier today.”
He added: “To mitigate this, we are putting into effect a more radical programme of reform to reduce costs, protect revenues and preserve the inherent value of the Group. This involves the refinancing of the Group and discussions are underway with potential lenders.”
