Real Good Food PLC (LON: RGD) have seen their shares jump on Friday morning after the firm narrowed its interim loss.
Real Good Food is a business which delivers cakes, bakery goods and cake decorations.
Shares in the firm jumped 4.15% to 6p on Friday following the positive announcement. 29/11/19 11:43BST.
The firm has seen a period of strong trading, however this may not be enough to suffice stakeholders in an increasingly competitive industry.
Competitors such as Finsbury Foods (LON: FIF) and Coca Cola (LON: CCH) have seen their sales increase in their most recent update.
Additionally, big time rival Greggs (LON: GRG) and Cake Box (LON: CBOX) reported strong trading figures a week ago, which causes shares to rally.
A “stellar” performance from its Food Ingredients division and further cost savings more than offset a more difficult trading period for the Cake Decoration unit in the first half of financial 2020.
The Liverpool based business said that current trading remained in line with management expectations for financial 2020 in both divisions.
For six months to September 30, Real Good Food recorded a pretax loss of £2.5 million, sharply narrowed from a £9.1 million loss a year ago.
Revenue rose 7% year on year to £32.4 million, as a result of strong performance in the food ingredients division.
First half underlying adjusted earnings before interest, taxes, depreciation and amortisation rose to £2.8 million from £929,000 as a result of revenue growth and cost savings.
Mike Holt, non-executive chair, said: “The group has made significant progress over the past six months, especially within Food Ingredients where capacity has doubled and is almost fully utilised with strong order intake and commitments from both new and existing customers. Whilst Cake Decoration has had a difficult period, its new chief executive has launched a major improvement programme focussed on developing strategic partnerships with customers and distributors and driving fundamental operational improvements, the benefits of which are beginning to come through.”
“The group now has two core businesses with clear growth strategies, and the leadership and resources to deliver upon them. With a lower cost base in place and the group’s improving performance increasingly evident, the board is confident of delivering further progress in the second half and beyond,” Holt added.