Real Good Food, the speciality food group focused on cakes, has secured £2.5m to fund their turnaround plan.
Real Good Food had previously announced a restructuring plan to deal with rising inflation which included job cuts and reduced overheads.
Real Good Food shares were up 42% at the time of writing on Monday.
The £2.5m injection came in the form of a 12 month facility from Hilco Private Capital which supplements a £6.3 million facility with Leumi ABL. Real Good Food now have a 12.1% average interest rate across third party funding.
“We are delighted that new funding has been secured to support the radical reform of RGF which is intended to reduce costs, protect revenues and preserve the inherent value of the Group,” said Mike Holt, Executive Chairman, Real Good Food
“With support from both customers and employees, we are making good progress on the required reforms and several major customers have already agreed to significant price re-sets. We are confident that the right actions are being put in place to return the business to sustainable profitability and being cash generative.”
“I am particularly pleased that Leumi ABL continues to support the Group and that Hilco has provided the new funds required. I would also like to thank our suppliers for their forbearance over recent months pending this funding being secured.”
One of Real Good Food’s main competitors was recently put into administration which highlights the risks to the business, but also the opportunity to gain market share.