Gross margin up 3.6% points at interim stage
​Real Good Food has transformed its prospects through corporate action over the past nine months. The market has yet to catch up with this. Importantly, the mix of business is biased to higher margin and growth markets. For example, Renshaw (72% Group operating profits) reported H1 10.8% operating margins up from 9.3% through a focus on sales mix. We therefore see good margin expansion for FY16E and strong prospects thereafter. Trading in the seasonally important Q3 has seen “strong sales trends… at Haydens Bakery and Cake Decorating Businesses.â€
Real Good Food operates in three markets, being cake decoration, food ingredients and premium bakery. Co.'s cake decoration division manufactures, sells and supplies cake decorating products and ingredients through its Renshaw, Renshaw Europe, Renshaw Americas, and Rainbow Dust Colours units. Co.'s food ingredients division manufactures and supplies a range of food ingredients from bagged sugar and dairy powders to chocolate coatings and jams through its units: R&W Scott, Garrett Ingredients, and Brighter Foods. Co.'s premium bakery division manufactures and supplies cakes and desserts to the retail and foodservice sectors through its business units Haydens, and Chantilly Patisserie.
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