Real Good Food warns on profit again

AIM-listed Real Good Food Company issued another profit warning on Tuesday as it confirmed that its major shareholders would provide additional funds to support working capital requirements, if needed.

The company warned at the start of the month that earnings before interest, tax, depreciation and amortisation for the year to the end of March 2017 would be lower than market expectations at around £2m, subject to final audit. On Tuesday, it said that following a review since that announcement, which is expected to lead to additional audit adjustments relating to inter-company trading and consolidation, earnings are now seen in the region of £1m.

The group also said it is facing a new banking covenant test at the end of September and discussions with its bankers are underway to vary certain conditions of the facility to reflect recent and anticipated trading.

"In addition, the board is pleased to announce that its major shareholders, NB Ingredients Ltd, Omnicane International Investors Ltd, and certain funds managed by Downing LLP have confirmed that they will, if required, provide additional funds to support the company's working capital requirements."

At 1105 BST, the shares were down 4.9% to 25p.