Christmas was not a happy period for Real Good Food PLC (LON:RGD), the bakery products group.
Sales during the early part of the Christmas trading quarter were “largely satisfactory”, the group revealed, but then the last few weeks of the year saw sales fall materially below expectations, largely owing to disappointing performance in the UK grocery market and de-stocking in overseas markets.
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The group said it expects to make an underlying loss in the year to the end of March of as much as £3.5mln; prior to profit warnings last year, the company had been expecting to make a profit of £6.5mln.
Looking on the bright side, the company said the considerable investment made throughout the group in the past 18 months is beginning to yield benefits.
A turnaround plan has been formulated and is now in the process of being implemented by the new management team to reverse the negative performance trend.
After August's embarrassing accountancy glitches under the previous management, the company has been focused on improving its corporate governance and its internal reporting and accounting processes and procedures.
READ Real Good Food businesses 'fundamentally sound' says new management
The company's major shareholders, who are represented on the board, remain fully committed and supportive of the turnaround plan and its implementation, Real Good Food said.
“The major shareholders have again stated their willingness, for instance, to bridge any short-term funding needs should a solution for the identified funding requirement not be in place as anticipated by the end of the first quarter. The majority of the group's debt already sits with the major shareholders; save for the asset-backed funding, borrowings from the group's primary lender now comprise just £1.75m of amortising term loan,” the trading statement said.
After an exceedingly tough 12 months, the shares trade some 42% below the level they were at a year ago and shed another 16% to 19p on Wednesday.