Real Good Food (LON:RGD) has warned profits will miss forecasts made only four weeks ago when it raised £15mln to fund an expansion drive.
The cake decoration and bakery products group said results for the year to March 2017 had been affected by two substantial sugar purchase claims discovered by the auditors.
RE: Real Good Food launches expansion drive to meet demand for cakes and decoration
Some previously capitalised development costs that should have gone through the profit and loss account will also affect the numbers.
As a result, underlying profits [EBITDA] are estimated to be £2mln, compared to a forecast of £5-£5.4mln made in June, though this figure too is subject to final audit.
Profits for the current year, to March 2018, has also been revised downwards due to a slower start on expansion work at the Renshaw business and soft trading conditions in the first three months of the year.
Underlying profits in the current financial year will now be some £2.3mln lower than previously expected.
In addition, Real Good also published details of previously undisclosed consultancy payments made over the past three years to executive chairman Pieter Totte and non-executive director Peter Salter, who is chairman of the Audit and Remuneration committees of the group.
“These are believed to amount to £250,000 to Pieter Totté and £25,000 to Peter Salter in FY 2014, £358,000 and £20,000 respectively in FY 2015 and £1.21 million to Pieter Totté in FY 2016,” said the statement.
“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.”