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Food ingredients business Real Good Food posted a first-half loss, as rising sales were offset by pressure on margins in its cake decorations unit.
Pre-tax losses for the six months through September amounted to £2.5m, compared to losses of £9.1m on-year, when the company booked an impairment charge.
Revenue from continuing operations rose 7% to £32.4m, while underlying adjusted operating earnings rose to £2.8m, up from £0.9m.
Earnings in the cake decorations unit fell amid challenges in the retail market and operational issues.
The company said it had experienced a delay in commissioning new soft icing equipment, which was due for completion in January.
The food ingredients unit, meanwhile, posted rise earnings, reflected significant growth with new and existing customers and the benefit of recent investment in additional capacity.
'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,' chairman Mike Holt said.
'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.'