Real Good Food PLC Company Update (6676M)

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RNS Number : 6676M

Real Good Food PLC

01 August 2017

For immediate release: 1st August 2017

Real Good Food plc

("the Company" or "Real Good Food")

Company Update

The Company announces that during the audit process of its full year accounts for the year ended 31 March 2017, two substantial anticipated claims regarding its sugar purchase arrangements have not yet materialised with the effect that it will not meet its previously forecasted profit figures.

In addition, the Board has concluded that certain development costs, which had previously been capitalised in FY 2017, should more appropriately have been expensed. The Board expects the total of these adjustments and further accrued expenses will have the effect of reducing the anticipated EBITDA to approximately GBP2.0 million for FY 2017. This number is still subject to final audit.

Following the recent injection of expansion capital announced on 29 June 2017, the Board has undertaken a full re-forecasting exercise for the year ending 31 March 2018. The investment projects funded by the expansion capital are now proceeding to plan and being well received by customers.

As the injection of expansion capital was agreed about three months later than anticipated this has resulted in some delay in the implementation of these projects, particularly at Renshaw. This, combined with slightly softer trading conditions in Q1, has adversely affected the Board's expectations for the financial year ending 31 March 2018 with the result that EBITDA is now anticipated to be approximately GBP2.3 million lower than previously expected. However, the anticipated benefits of these projects remain robust and are expected to be fully realised in the financial year ending 31 March 2019.

The Board further announces that it has realised that certain payments made to certain Directors for consultancy services have not been separately disclosed in the related party transaction notes to its previously published audited Annual Report & Accounts for FY 2014, FY 2015 and FY 2016. These are believed to amount to GBP250,000 to Pieter Totté and GBP25,000 to Peter Salter in FY 2014, GBP358,000 and GBP20,000 respectively in FY 2015 and GBP1.21 million to Pieter Totté in FY 2016.

These costs were fully accounted for in the relevant accounting periods so have no impact on the reported profit before tax for these three years.

The Company now expects to announce Final Results for the year ended 31 March 2017 at the end of August 2017.

-Ends-

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

ENQUIRIES:

Real Good Food plc

Pieter Totté, Executive Chairman Tel: [phone]

David Newman, Finance Director

Andrew Brown, Marketing Director

finnCap Ltd (Nomad and Broker)

Matt Goode Tel: [phone]

Carl Holmes

Daniel Stewart and Company Plc (Joint Broker)

David Lawman Tel: [phone]

Belvedere Communications (PR)

John West Tel: [phone]

Kim van Beck

About Real Good Food plc

Real Good Food plc 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 (Brighter Foods, Garrett Ingredients and R&W Scott) and Premium Bakery (Haydens and Chantilly Patisserie).

This information is provided by RNS

The company news service from the London Stock Exchange

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August 01, 2017 02:01 ET (06:01 GMT)