Real Good recovery

It has been a helter-skelter ride in Real Good Food since my recommendation of the company here last December, but the recovery – to a recent 68p – looks well founded. RGF’s purchase of sugar supplier Napier Brown Foods was not well timed because delays in the introduction of the new European Union sugar regime have resulted in something of a sugar mountain developing. However, NBF appears to have picked up strongly in the second quarter, helping RGF to an operating profit of £4.7 million in the half-year and earnings, before exceptionals and amortisation, of 3.1p per share. Last year, there was a loss of 0.1p per share.

With NBF picking up (albeit at lower margins than before) and good progress in most of the other operating areas, RGF looks one to stick with if you bought on my recommendation at 80p.