Kitwave confident despite recent trading weakness
By Josh White
Date: Thursday 02 May 2024
(Sharecast News) - Kitwave Group said in a trading update on Thursday that it was maintaining its performance in line with current market expectations for the year ending 31 October.
The AIM-traded firm put its trading down to sustained organic growth, as well as the positive impact of acquisitions made over the past 18 months.
While it anticipated that its operating profit for the period would be slightly lower year-on-year, it said that was due to reduced demand within the hospitality customer base of its higher margin foodservice division.
That decline was reportedly due to prolonged and unusually high levels of wet weather experienced in recent months.
Additionally, increased investment in infrastructure preceded revenue-generating opportunities, with benefits expected to materialise later in the year.
The recent acquisition of Total Foodservice was also anticipated to contribute positively to second-half trading.
Kitwave recently completed two acquisitions within its foodservice division.
In November, Wilds of Oldham - a family-run drinks wholesaler servicing both on-and-off trade in Oldham, Manchester - was acquired.
Following that, in March it acquired Total Foodservice Solutions, a prominent independent food wholesaler in Northern England.
The integration of both acquisitions into the group was reportedly progressing smoothly.
"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," said chief executive officer Ben Maxted.
"The group has an excellent platform for growth in the form of organic developments and incorporating the full benefits from its strategic acquisitions."
Maxted said the company's most recent acquisitions demonstrated that it was continuing to capitalise on the opportunities available in a fragmented delivered wholesale market.
"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."
At 1027 BST, shares in Kitwave Group were down 7.75% at 375p.
Reporting by Josh White for Sharecast.com.
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