Napier Brown up for sale, confirms Real Good Food6 Apr 2015
Diversified food business Real Good Food has issued a trading update, confirming that it is looking for a buyer for its Napier Brown sugar distribution subsidiary. The well-publicised reductions in EU sugar market prices are continuing to make trading difficult for both Napier Brown and Garrett Ingredients, the company said. Following a very poor first […]
The well-publicised reductions in EU sugar market prices are continuing to make trading difficult for both Napier Brown and Garrett Ingredients, the company said. Following a very poor first half, Napier Brown has returned to profit but, notwithstanding the improved trading in the second half, has unfortunately remained behind expectations for the year, the statement noted. The rest of the Group has performed strongly and ahead of management expectations, with Renshaw and Haydens in particular performing well. The group has, in addition, incurred significant one-off transaction costs as well as legal costs in relation to the discussions with the UK and EU Competition Authorities.
The company confirmed that it is in discussions with several parties in relation to a potential transaction involving Napier Brown. Such a transaction, if successfully concluded, would, it said, enable the company to significantly strengthen its balance sheet and focus on more stable earnings growth going forward. A further update will provided in due course.
Overall, as a result of the above, the Company expects reported earnings, prior to any adjustments for one-off costs or restructuring of the Group, to be significantly behind current market expectations for the year ending 31 March 2015.
”The difficulties in the sugar market have been covered extensively elsewhere but there are signs that prices have reached their low point and will recover over the next two years,” said Pieter Totté, Executive Chairman. “As stated above, we are examining options for our sugar business. Elsewhere I am delighted with performance in two areas in particular: in cake decoration, Renshaw has performed very strongly and our recent acquisition of Rainbow Dust Colours is already giving us sales opportunities both in the UK and across Europe, while in premium bakery, Haydens has continued to trade well, successfully expanding its customer base. We plan to give additional focus to these attractive sectors over the coming year.”
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