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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Real Good Food Plc | LSE:RGD | London | Ordinary Share | GB0033572867 | ORD 2P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.45 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMRGD
RNS Number : 0498L
Real Good Food PLC
20 December 2018
20 December 2018
Real Good Food plc
("RGF" or "the Group")
Disposal
Group financial position transformed by disposals since the year end
Real Good Food plc today announces that it has completed the sale of R&W Scott Limited ("R&W Scott") to its management team (the "MBO"). The Group will receive consideration of GBP3.95 million as a result of the MBO, payable by means of a cash payment of GBP1.50 million, GBP0.5 million of which is deferred until 30 September 2019, and the assumption by R&W Scott's management team of GBP2.45 million of third-party debt.
R&W Scott has been producing jams and preserves for over 130 years and is based out of Carluke in Lanarkshire, Scotland. R&W Scott also manufactures chocolate flavoured coatings, sweet and savoury spreads and speciality soft icings, servicing a number of sectors including retail, foodservice and wholesale customers worldwide and has been a part of the Group since the Group's inception.
In the Group's financial year ended 31 March 2017, R&W Scott contributed GBP10.36 million of revenue, and incurred a loss before non-recurring items and tax of GBP1.22 million, and a pre-tax loss of GBP3.3m, closing that year with net assets of GBP1.89 million. The Group expects to incur an accounting loss for the Group on disposal of approximately GBP3.0 million and a write down of parent company reserves at 31 March 2019 of approximately GBP5.0 million.
Use of proceeds - Group financial position transformed
The initial cash proceeds received will be utilised for working capital purposes. In total, the three disposals completed since the year end of Garretts, Haydens and R&W Scott have raised a total consideration of GBP17.8 million, of which GBP10.1 million has been received in cash, GBP7.2 million has been the assumption of third-party debt and GBP0.5 million is deferred.
Together with the Open Offer to raise GBP1.0 million completed in August, and the funding arrangements put in place in June 2018, the Group's financial position has been transformed this calendar year, eliminating term debt with the bank and providing working capital for continuing general requirements as well as growth.
Reasons for and benefits of disposal
Following a process of exploring strategic options for the R&W Scott business, the MBO offered the best route to maximising value from the business, whilst disposing of this non-core asset.
Having disposed of R&W Scott, Garretts and Haydens, RGF has now completed the significant corporate activity intended as the first part of its strategy, and management is able to focus its attention and resources on growing the two main continuing, profitable businesses which together now comprise the majority of the Group, Cake Decoration and Brighter Foods.
RGF was advised by Spayne Lindsay & Co. LLP on the transaction.
Hugh Cawley, Chief Executive, said:
"This disposal, alongside those of Haydens and Garretts, marks a significant milestone in the turnaround and performance improvement programme of Real Good Food. We are now able to focus on the core continuing businesses, Brighter Foods and Cake Decoration, with no bank term loan and a fully funded growth plan.
"Overall, through the actions of the last twelve months, the performance of, and prospects for, what is now a smaller and more focused Group, have improved considerably. The Company now has a solid platform from which to maximise earnings and look to optimise shareholder value."
Enquiries:
Real Good Food plc Tel: 0151 541 3790 Hugh Cawley, Chief Executive Harveen Rai, Finance Director finnCap Limited (Nomad and Broker) Tel: 020 7220 0500 Matt Goode / Carl Holmes / James Thompson (Corporate Finance) MHP Communications (Financial PR) Tel: 020 3128 8100 Reg Hoare / Katie Hunt rgf@mhpc.com About Real Good Food Real Good Food plc is a diversified food business serving a number of market sectors including retail, manufacturing, foodservice and export. The Company focuses on three markets: Cake Decoration (Renshaw and Rainbow Dust Colours), Food Ingredients (Brighter Foods) and Premium Bakery (Chantilly Patisserie).
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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(END) Dow Jones Newswires
December 20, 2018 02:01 ET (07:01 GMT)
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