New-look Real Good Food Group has all the ingredients for success
Stockbroker Shore Capital says bakery ingredients manufacturer looks set to rise after sugar division sale.
Toxteth bakery ingredients manufacturer Real Good Food Group (RGF) is on the cusp of a new beginning, says a Liverpool stockbroker.
In May RGF offloaded its loss-making sugar business, Napier Brown, for £34m to French co-operative Tereos after a damaging two year pricing row with supplier British Sugar – part of Primark owner Associated British Foods – and ahead of a potentially volatile shake-up in European production quotas.
Phil Carroll, a research analyst with stockbroker Shore Capital, said this marked a transformational moment for RGF.
It freed RGF’s management from the unwanted distraction that was British Sugar, and effectively moved the company into a net cash position, wiping out its £30.1m group debt and providing a platform to develop the remaining five businesses, which should see a steady rise in profits over the next four years.
Mr Carroll said he was impressed by the price RGF exacted from Tereos.
He added: “Management achieved a valuation that was significantly ahead of our expectations for its sugar division that materially deleverages the group’s balance sheet.”
He said this gives RGF a clearer focus and shape.
Read the full article on the Liverpool Echo website.