2nd May 2024 12:26
(Alliance News) - Kitwave Group PLC on Thursday said it continued to trade in line with current market expectations for its financial year ending October 31, despite expecting half-year revenue to fall.
The North Shields, England-based food wholesaler said the performance reflected both continued organic growth and the benefit from acquisitions made over the past 18 months.
Operating profit performance during the first half of Kitwave's financial 2024 is expected to be slightly behind the prior year, the company said. This reflects lower levels of demand in the hospitality customer base of the higher margin Foodservice division, due to a historically high and sustained period of wet weather over recent months.
Kitwave said it also increased investment in its infrastructure "ahead of the revenue generating opportunities associated with these investments".
It said some of these benefits, alongside the second half inclusion of trade from its recent acquisition of Total Foodservice Solutions Ltd, will further increase the weighting of trading toward the second half of the year.
During the half-year period, Kitwave completed two acquisitions in its Foodservice division: in November 2023, it acquired Oldham, Manchester-based drinks wholesaler Wilds of Oldham, and in March 2024, it acquired Total Foodservice Solutions, an independent food wholesaler operating in the north of England
Kitwave said the integration of both businesses into the wider group is "going well".
Overall, Kitwave said it remained confident in the outlook of the company.
"I am pleased to report that the group has continued to make progress towards its operational and financial targets and that we remain confident of achieving a positive outcome for the full-year results. The group has an excellent platform for growth in the form of organic developments and incorporating the full benefits from its strategic acquisitions. The most recent acquisitions demonstrate that we continue to capitalise on the opportunities available to us in a fragmented delivered wholesale market," said Kitwave Chief Executive Officer Ben Maxted.
"Kitwave is well positioned to continue delivering value to its customers and shareholders and we look forward to updating the market on further progress in due course."
Shares in Kitwave were down 8.9% to 370.36 pence each in London on Thursday afternoon.
By Greg Rosenvinge, Alliance News senior reporter
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