Real Good Food, a UK firm, have taken the decision to sell off a part of their ingredient business – dairy and sugar supplier Garretts – to Kent Foods, in order to tackle their debt.
Garretts Ingredients will be sold to Kent Foods for around £1.8m, on a debt free/cash free basis, and the funds generated from the sale will be used to reduce the debt at Real Good Food.
There are a number of market sectors that are covered by Real Good Food, which include wholesale, foodservice, export, manufacturing and retail.
The main business units at Real Good Food are cake decoration, premium bakery and specialty food ingredients. Their brands included Garrett Ingredients, but also R&W Scott, Brighter Foods, Renshaw, Rainbow Dust Colours, Haydens and Chantilly Patisserie.
The company’s chief executive, Hugh Cawley, said: “We are pleased to have agreed the sale of this small, non-core business as part of our plan to improve the Group’s performance.”
A statement by the company said: “The Board believes that the business has more in common with Kent whose skills and aptitude are better suited to managing its contracts, given Real Good Food’s resources are being increasingly focused on serving the end consumer.”
Garretts supply sugar, dairies and a host of other food ingredients across the UK to food companies, which also includes SMEs and larger manufacturers.
For the financial year ending March 2017, Garretts reported an operating loss of £0.9m, but had contributed £21.3m worth of revenue.
In addition, the unit had £1.9m worth of net assets for the same year, and Real Good Food have stated that they expected to report a fairly modest loss on the disposal.