On the go: Liverpool-based cake decoration specialist Real Good Food has used the proceeds from the sale of its snack bar business to “eliminate” its defined benefit scheme deficit.
In May, the company injected £8.5m into the scheme’s assets, following the £35.6m sale of its Brighter Foods business to The Hut Group.
Real Good Food sponsors the Napier Brown Retirement Plan, which was closed to new members in 2000, as well as a defined contribution scheme for all current employees, funded on a monthly basis.
The DB pension scheme valuation reported a gross deficit of £7.5m for the year ending March 31 2021. Assets increased by £0.8m to £14.5m, while liabilities increased by £1.1m over the year to £21.9m.
In the group’s annual report, the company stated that because of the £8.5m payment into the scheme, which is “broadly equivalent to the plan’s low-dependency technical provisions basis”, it is expected that the group “will not have to pay further deficit contributions, which currently amount to £1m per annum”.
This will continue until a new schedule of contributions is decided, based on the end of its financial year valuation.
The agreement would take into account the cash injection, which “may result in payments of up to £1.5m, in aggregate, being paid between January 1 2023 and June 30 2025 to close the gap towards a buyout basis”.
The proceeds from the sale of Brighter Foods, as well as two other businesses, was also used to halve the group’s debt burden. Overall, the net debt was reduced by £26.4m to a year-end liability of £48.8m.
The group posted an overall net loss of £6.1m for the year.
