Real Good Food makes £15.5M investment
Cake decorations manufacturing business Renshaw in Liverpool and Devizes, Wiltshire-based bakery Haydens are to receive the investment following an increase in demand, driven by international sales.
The funds would also support the recent launch of a mainstream retail brand at Renshaw and Haydens winning two major new retail customers.
RGF planned to invest £7M in expanding Renshaw’s capacity by more than 50%, as well as the installation of a production line for soft icings. It said the expansion would support its strategy to broaden the range of products it could offer to its customers.
Haydens is to receive £8M of investment to reconfigure site operations, including blast freezing capability and the installation of a new, automated Yum Yum line.
Grow site capacity
The investment would grow site capacity and increase sales at the business from about £30M a year to more than £50M.
Both investments would also increase efficiency at the companies, upskill the workforce and mitigate the impact of the forthcoming Living Wage increases, claimed RGF.
RGF expected the expansion plan to be completed by the end of September this year.
RGF received funding from private equity firm Downing, which issued the manufacturer with a secured loan note of up to £8.75M and invested £2.75M for a 10% shareholding in the company at a price of 35p per share.
RGF also secured two £2M loan facilities from existing shareholders – Napier Brown Holdings and Omnicane – in order to maintain working capital in the business.
RGF executive chairman Pieter Totté said the investment in Renshaw and Haydens would drive efficiencies, customer growth, improve operating margins and accelerate the RGF’s organic growth.
Accelerate the company’s organic growth
“We have already embarked upon this within our cake decorating division and are seeing positive results in order intake at Renshaw and Rainbow Dust [its edible glitter business],” said Totté.
“The board has taken the decision to raise the expansion capital in order to enable us to accelerate our investment programme into other divisions, including a major increase in capacity at our Haydens site within the premium bakery sector.”
Totté added that the investment programme would secure RGF’s competitive position for the long term and would ultimately drive future returns for its shareholders.
Additionally, Downing was granted the right to appoint a new non-executive director to RGF’s board, with partner and head of private equity Judith Mackenzie joining with immediate effect.
