|
Real Good Food PLC on Friday said it is considering further job cuts as macroeconomic headwinds continue to create tough trading conditions.
The Liverpool-based food manufacturing business, which specialises in cake decoration, said ‘hyper cost inflation’ has driven overall costs 30% higher. It added that wider economic conditions have also affected short-term demand for products as households react to pressure on disposable income.
Real Good Food shares plummeted by 31% to 0.90 pence each in London on Friday morning.
For the first five months of the financial year ending March 31, 2023, volumes were down 29% compared to a year prior and were 16% lower than Real Good Food's pre-pandemic benchmark, financial 2020.
The business is now increasing prices and reducing costs to mitigate this, but is currently incurring losses on earnings before income, tax, depreciation and amortisation.
After commencing a voluntary redundancy programme in May 2022, Real Good Food will further reduce headcount. Its recovery plan includes significant price re-sets with customers and £3.2 million of overhead cost savings.
Further, the firm said that the successful implementation of the plan is expected to return between £2.0 million and £4.0 million in Ebitda, under current market conditions.
Executive Chair Mike Holt said that although market conditions remain ‘extremely challenging’, the company would be effecting a more radical programme ‘to reduce costs, protect revenues and preserve the inherent value of the group.’
Copyright 2022 Alliance News Limited. All Rights Reserved.
|
