Weather puts a dampener on Kitwave’s profits
WHOLESALER Kitwave has warned that profits have dipped after prolonged wet weather hit many of its customers in the hospitality sector.
The North Shields-based business has issued a trading update for the six months to the end of April, in which it said trading is in line with current market expectations for its 2024 financial period, thanks to both organic growth and acquisitions made in the wholesale market over the last 18 months.
But it said that its operating profit was “slightly behind the prior year” due to “lower levels of demand in the hospitality customer base of the higher-margin food service division, due to a historically high and sustained period of wet weather over recent months”.
Kitwave said that investment into its infrastructure meant that trading would be weighted towards the second half of the year.
Chief executive officer Ben Maxted said: “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.
“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.”
Kitwave was formed with a single confectionery cash-and-carry based in North Shields in 1998 but has grown significantly over the last 13 years through a series of acquisitions. Its most recent deal saw it acquire Yorkshire firm Total Foodservice Solutions for £21m in March.
The firm listed on the London Stock Exchange in 2021 and earlier this year released results showing turnover of more than £600m and operating profit of £29.3m.
In today’s trading update, Kitwave said that it was confident in its outlook and that the integration of recently acquired businesses was going well.