Real Good Food confident despite weaker sales

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Date: Thursday 17 Jul 2008

LONDON (ShareCast) - Real Good Food remains confident of achieving a satisfactory result for the full year despite very challenging market conditions that forced sales down at the sugar and bakeries units.

The firm, which supplies marzipan, icing and other ingredients to bakeries, blamed material and fuel prices at unprecedented levels and lower consumer confidence.

Lower sugar prices and the loss of trading volume in one account resulted in a 10% drop in sales at the sugar business during the six months to 30 June. Profit fell in line with expectations.

Difficult conditions are seen continuing for the rest of this year, but noises from the EU sugar reform programme are “most encouraging, with the market effectively moving into equilibrium during 2009,” said RGF.

The bakery division suffered a 4% dip in sales during the period, mostly due to the poor performance on two key lines, which are currently being re-developed, but bakery ingredients upped sales by 13%.

“As I indicated in my preliminary results statement, the first half has been characterised by challenging market conditions, with lower sugar prices on the one hand and higher prices in our bakery and bakery ingredients businesses on the other,” said chairman Pieter Totte.

“The management team is responding to these difficult conditions by striving for greater operational efficiencies, product innovation and a strong focus on customer service.”

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