Stockbroker Shore Capital says bakery ingredients manufacturer looks set to rise after sugar division sale.
Toxteth bakery ingredients manufacturer Real Good Food Group (RGF) is on the cusp of a new beginning, says a Liverpool stockbroker.
In May RGF offloaded its loss-making sugar business, Napier Brown, for £34m to French co-operative Tereos after a damaging two year pricing row with supplier British Sugar – part of Primark owner Associated British Foods – and ahead of a potentially volatile shake-up in European production quotas.
Phil Carroll, a research analyst with stockbroker Shore Capital, said this marked a transformational moment for RGF.
It freed RGF’s management from the unwanted distraction that was British Sugar, and effectively moved the company into a net cash position, wiping out its £30.1m group debt and providing a platform to develop the remaining five businesses, which should see a steady rise in profits over the next four years.
Mr Carroll said he was impressed by the price RGF exacted from Tereos.
He added: “Management achieved a valuation that was significantly ahead of our expectations for its sugar division that materially deleverages the group’s balance sheet.”
He said this gives RGF a clearer focus and shape.
Read the full article on the Liverpool Echo website.