Six mths results to 30.11.03

Real Good Food Company Plc (The) 27 February 2004 For immediate release 27th February 2004 The Real Good Food Company Plc ('Real Good Food' or 'the Company') Results for the six months ended 30th November 2003 Chairman's Statement These results are required to be announced by the AIM Rules as they cover the six-month period following the reporting date (31st May, 2003) of the financial information included in the Company's Admission document. The Company's year-end remains 31st August, consequently these results include only three months of trading of the new financial year. The results reflect a period of transition for your Company, following the acquisition of Haydens Bakeries, Eurofoods/CoolFresh and Cakes.co.uk (trading as Seriously Scrumptious) in July 2003 and the figures now being reported reflect their results since that date. Following their acquisition, the trading operations of the acquired businesses were hived up into the Company in August 2003. The Company was admitted to trading on the Alternative Investment Market of the London Stock Exchange on 29th September 2003 ('Admission'). In the two months following Admission the board carried out a strategic review of the group's customer base, product ranges and operating costs. As a result, certain cost savings have already been achieved, with more expected in the long term, as the efficiency of the operating facilities is further improved. The Board expects that these improvements will have a positive impact on future margins. Furthermore, the capital expenditure programme has now been finalised and will commence in the spring of 2004. The results for the period under review show a loss after taxation of £541,000 (after £38,000 of expenses relating to Admission) on a turnover of £10.23 million, giving a basic loss per share of 12.11p. In the corresponding period in 2002 the businesses on a pro-forma basis recorded an unaudited loss after taxation of £832,000 on a turnover of £9.09 million. In December 2003, the Company announced the terms of a proposed placing to raise up to £10 million before expenses, which was completed in January of this year. At that time, I reported on the performance of the three operating divisions and I can now update you as to progress since that date. Haydens Bakeries Sales to our major customers, Waitrose and Marks & Spencers, were ahead of the board's expectations in the weeks leading up to Christmas, with a record level being achieved in the last full week before the holiday period. Since the start of the year the board has taken steps to bring labour costs in line with expected sales volumes and significant progress has been made in raw material control. The outlook for volumes in the medium term is very positive as specific developments with our largest customers are expected to come on stream in the spring and summer of this year. In addition, capital expenditure budgeted for the first quarter of 2004 is expected to improve operating margins further. Eurofoods/Cool Fresh While sales to our largest customer Caffe Nero are in line with management's expectations, Eurofoods has agreed to terminate a supply contract 3 months ahead of its planned termination date in order to replace those sales with sustainable higher margin business, which has now started to flow through. In addition, earlier this month, new supply arrangements were agreed which are expected to generate annualised sales of £1 million. I am also pleased to announce the appointment of an experienced managing director to this division who, while progressing with the cost control programme initiated by the board since the acquisition in July 2003, has generated a number of new business opportunities already. Seriously Scrumptious Following the closure of the old sites in Glastonbury and the commissioning of the new factory nearby, the board has focused on rationalising the customer base and the product range of this division. This has now been completed and management changes have been implemented. The new team is now refocusing the business and workforce towards those product ranges that generate the highest margins. The directors anticipate receiving technical approval from the British Retail Consortium in April 2004, which is expected to lead to, increased sales from the group's customer base and provide cross-selling opportunities throughout the group. Group Developments The Directors have also identified certain acquisition opportunities, which are under active consideration and I look forward to updating you as to the Company's progress in the coming months. Pieter Totte Chairman 27th February 2004 Profit and loss account For the six months ended 30th November, 2003 6 months to November 2003 (unaudited) £'000 Turnover 10,228 Cost of sales (8,112) --------- Gross profit 2,116 Selling & Distribution Expenses (931) Administrative Expenses (1,693) --------- Operating loss (508) Interest receivable 3 Interest payable (36) --------- Loss before taxation (541) Taxation - --------- Loss for the period (541) ========= Basic loss per share (pence) 12.11 ========= Consolidated Balance Sheet As at 30th November 2003 30th November, 2003 (Unaudited) £'000 Fixed assets Intangible assets 617 Tangible assets 3,193 --------- 3,810 Current assets Stock 648 Debtors 3,350 Cash at bank and in hand 783 --------- 4,781 Creditors: amounts falling due within one year (6,063) --------- Net current liabilities (1,282) --------- Total assets less current liabilities 2,528 Creditors - amounts falling due after more than one year (1,461) --------- Net assets 2,067 ========= Capital and reserves Called up share capital 105 Share premium account 2,505 Profit and loss account (543) --------- Shareholders funds 2,067 ========= Consolidated cash flow statement For the six months ended 30th November, 2003 Note 6 months to 30th November, 2003 (Unaudited) £'000 Net cash outflow from operating activities A (419) Returns on investments and servicing of finance Interest paid (36) Interest received 3 --------- Cash outflow from returns on investments and servicing of finance (33) Capital expenditure and financial investment Purchase of intangible fixed assets (12) Purchase of tangible fixed assets (685) --------- Net cash outflow from capital expenditure and financial investments (697) --------- Acquisitions and disposals Purchase of subsidiary undertaking (928) Cash received with acquisition (539) --------- Net cash inflow from acquisitions and disposals (1,467) --------- Cash outflow before financing (2,616) --------- Financing Issue of ordinary share capital 2,613 --------- Cash inflow from financing 2,613 --------- Decrease in cash B (3) ========= a. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 30th November 2003 (Unaudited) £'000 Operating loss (510) Goodwill amortisation 32 Increase in stock (166) Increase in debtors (505) Increase in creditors 730 ---------- Net cash outflow from operating activities (419) ========== B ANALYSIS OF NET DEBT At 31st May Increase in Cash Flow At 30th debt November 2003 2003 £'000 £'000 £'000 £'000 Cash at bank 13 - 770 783 Overdraft - - (773) (773) ----------- --------------- ----------- ----------- --- --- --- 13 - (3) 10 Hire purchase - (16) - (16) ----------- --------------- ----------- ----------- 13 (16) (3) (6) =========== =============== =========== =========== Notes to the Results 1. RESULTS These results do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. 2. DIVIDENDS The directors are not declaring a dividend for the six months ended 30th November 2003. 3. LOSS PER SHARE The basic loss per share is based on the retained loss for the six months divided by the weighted average number of shares in issue throughout the six months ended 30th November 2003 of 4,465,938 4.COPIES OF RESULTS Copies of the Results will be available to members of the public from the Company's registered office, Hopton Industrial Estate, London Road, Devizes, Wiltshire SN10 2EU. Enquiries The Real Good Food Company Pieter Totte Tel: 01428 644099 John East & Partners Limited John East Tel: 020 7628 2200 This information is provided by RNS The company news service from the London Stock Exchange

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