Real Good: now baking ingredients go into reverse

A sharp downturn in the baking ingredients business prevented an otherwise respectable performance in the first half at Real Good Food working through to profits and earnings. As it is, earnings per share came through at 0.4p, which compares with a small negative figure at the same stage last year. However, in the second half, Real Good will not have any contribution from its fish division, sold in June, and this is going to restrict its ability to make any advance on the previous annual tally of 2.6p per share.

The business is now heavily dependent on the sugar operations of the former Napier Brown and they, in turn, are hampered by quota cuts arising from the new EU sugar regime. Down from the 80p at which I tipped the shares in December 2005 to 45.5p now, Real Good has little scope for surprising the market on the upside. It is now best to cut your loss and look to recoup elsewhere.