Bakery products group Real Good Food PLC (LON:RGD) has agreed a £4mln short-term loan with three key shareholders to tide it over in the run-up to Christmas.
NB Ingredients, Omnicane International and fund manager Downing have provided the loan to relieve pressure on cash availability as the autumn stock-build increases and to cover its ongoing capital investment programme.
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The trio of shareholders had said previously they would provide short-term funds if needed.
An initial tranche of £1.5mln will be drawn down immediately, with any further drawdowns in tranches of £500,000. Interest is 10% with first payment in March.
Elsewhere, Real Good said the £11mln upgrade of the Yum Yum (a glorified doughnut) line at its Haydens subsidiary is now in operation while one of two new product manufacturing lines at Renshaw is now producing stock for the Christmas. A new jam line at R&W Scott has also started to deliver to a major retailer.
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The rest of the upgrades at Renshaw and Haydens are scheduled for completion by the end of December.
Based on overall trading year to date, Real Good forecast an underlying profit [EBITDA] of approximately £6.5mln in the year to March before one-off costs, though the full benefits of the capital investment at Haydens and Renshaw won’t be seen until the following year.