Premium bakery lifts Real Good Food sales 5% in Q3

06-Dec-2016 - Last updated on 06-Dec-2016 at 13:16 GMT

Bakery is a growing sector as consumers are migrating to healthier yet still indulgent treats, which opens opportunities in product development. ©iStock/alfernec

Real Good Food says its Premium Bakery division has helped it grow sales in its interim results for the six months leading up to September 30, 2016.

The UK food business reported a 5% growth in sales to £49m ($62.5m), up from £46.7m ($59.6m) during the same period last year. The group’s gross profit increased to £13m ($16.5m), up from £12.5m ($15.9m) in 2015.

The corporation’s growth was driven primarily by solid performance from its Premium Bakery division.

This is a growing sector as consumers are migrating to healthier yet still indulgent treats, which represents wide open opportunities in new product development, wrote Pieter Totté, executive chairman, in the company’s annual general report for the year ended 31 March.

The division also benefited from the successful integration of Chantilly in February this year.

Diverse product profile

Servicing customers both in the UK and abroad, Real Good Food focuses on three pillar markets: Cake Decoration (through its companies Renshaw and Rainbow Dust Colours); Food Ingredients (encompassing Garrett Ingredients and R&W Scott) and Premium Bakery (consisting of Haydens and Chantilly Patisserie).

According to Totté, the group makes the majority of is profits in the second half of the year, which includes the important period leading up to Christmas.

EBITDA was down by £0.8 million ($1m) from the previous year – from £2m to £1.2m ($2.55m to $1.5m) – due to increased investments, including a new Development Center in Liverpool, UK.

The Food Ingredients division also experienced sluggish operation, driven by volatile commodity pricing.

However, Totté maintained the Q3 trading period was in line with expectations. And, despite facing a weakened sterling and increased raw material prices, the company is hopeful its year end EBITDA will be ahead of last year’s £5m ($6.3m).

The future looks good

Looking forward, he said investing in developing the new Development Centre in Liverpool is beginning to pay off.

The facility, opened in May, incorporates the Group Innovation Centre that develops new products for its business using emerging technologies in product, processing and packaging.

It also houses the Renshaw Academy, aiming to be ‘the most inspirational cake decorating academy in the world’, while also monetizing Real Good Food's cake decorating products.

Totté added the company’s recently opened sales and warehousing operation in the US will also enable sales growth from early 2017.

Real Good Food also plans to uprgade its Liverpool and Devizes sites to improve operational efficiency.