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Real Good Food PLC reported on Thursday it received a loan from its shareholders as it expects to report a yearly loss.
The Liverpool, England-based food manufacturer said it secured a £550,000 short-term loan from its principal shareholders, Downing LLP and Omnicane Investors Ltd.
Real Good Food said the loan supports the additional funding of £2.5 million secured from Hilco Private Capital in November 2022 to supplement the company’s £6.3 million facility with Leumi ABL.
The new loan notes will be repaid in October 2023 as part of the refinancing of debt when the current Hilco facility becomes due for repayment on November 18, Real Good Food said.
The company also announced on Thursday it expects to report a loss for the financial year ended March 31 2023.
‘Q4 revenue was below expectations, as consumer demand and confidence were knocked by speculation in the media of a recession in the early months of 2023,’ it said.
For the first half ended September 30, the firm had reported a pretax loss of £3.8 million, widening from £1.2 million a year before.
Looking ahead, Real Good Food’s earnings before interest, taxes, depreciation and amortisation for financial 2024 are expected to be between £2.0 million and £4.0 million.
Chair Mike Holt said: ‘Market conditions remain as challenging as when we last reported in December 2022. However, our internal reform programme is progressing well and, without relying on a market upturn, the board expects the group to be both Ebitda profitable and cash generative in the new financial year.
‘After a tough start to 2023, we are beginning to see early signs of some improvement in demand.’
Shares were trading flat at 1.10 pence in London on Thursday morning.
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