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Real Good Food says plans work despite big profit drop

THE Real Good Food Company has insisted its strategy of investing in branding and commercial development is on course in spite of half-year profits tumbling by almost 90%.

The AIM-listed business, which owns Carluke based jam maker R&W Scott, saw revenue dip more than 5% from £137.8 million to £130.14m in the six months to the end of September because of lower sugar volumes.

Earnings before interest tax and depreciation were down from £3m to £2.2m which was attributed to £500,000 of spending on brand development and a £200,000 outlay to set up a sales office in Brussels. Pre-tax profits fell from more than £1.1m to £111,000 in the six months.

Pieter Tiotte, executive chairman, said the group - which also owns sugar distributor Napier Brown, bakery ingredients firm Renshaw, dairy specialist Garrett Ingredients and patisserie Haydens - was well placed ahead of the traditionally busy Christmas period and it was evaluating how a drop in European Union sugar market pricing would affect margins.

Mr Tiotte said Napier Brown's sales volumes have increased "significantly" since October while the Whitworths sugar brand is expected to deliver sales value of more than £100m in the next 12 months.

He added: "our branding and sales initiatives at Renshaw, R&W Scott and Haydens are delivering in line with our expectations and we anticipate that in our next financial year some 25% of group sales will be represented by branded product."

Shares, which were trading at less than 37p in March, closed down 9.62p, or 14%, at 59.12p.

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