Shares in cake decoration manufacturer Real Good Food (LON:RGD) dropped over 40 percent on Tuesday, after the has warned profits will not meet forecasts made just a month ago.

The company estimated underlying profits to be between £5 and £5.5 million in June, but said on Tuesday they would be reduced to around £2 million.

The announcement comes just after Real Good Food raised £15 million to fund an expansion drive. However, results for the year to March 2017 will now be affected by two substantial sugar purchase claims discovered by the auditors.

Profits for the current year, to March 2018, has also been revised downwards due to a slower start on expansion work at the Renshaw business and soft trading conditions in the first three months of the year.

Shares in Real Good Food are currently down 38.64 percent at 21.51 (1015GMT).