Shortages, staff absences dent sales at Real Good Food
Cake decorations maker Real Good Food said on Monday that second-half revenue was set to be similar to the same period a year prior after shortages and staff absences dented sales in December and January.
In an update for the year to the end of March 2022, the AIM-listed company said it entered its seasonally busier second half "in good shape" and had expected to report on further progress being made after a solid start to the year.
"Sales in December and January, however, have been much lower than anticipated due to severe shortages, and erratic deliveries, of certain ingredients and services, compounded by high absence rates because of the omicron variant, which affected our ability to fulfil customer orders," the company said. "We believe that these issues are short term ones and will ameliorate in the coming months."
Revenue and EBITDA in the first half were "well ahead" of the previous year, with revenue back to pre-covid levels. However, H2 revenue is expected to be at a similar level to the second half of last year, despite a pick-up in sales to the wholesale sector. Real Good Food said international sales, which had been expected to show double-digit growth, are going to be marginally below last year's numbers.
"Overall, with increased costs during the second half of the year, the group is expected to make a small profit at EBITDA level broadly similar to underlying EBITDA reported in the prior year," it said. "Cash at the half year was £2.7m, a modest cash inflow is expected to be reported for the second half of the year."
At 1030 GMT, the shares were down 9% at 2.50p.