Food and drink wholesaler Kitwave saw its revenues increase 8% to £297m during the six months to 30 April, although weaker demand in the group’s foodservice hospitality customer base impacted profits.
Operating profit fell from £10.2m to £9.3m, while pre-tax profit slipped from £8.3m to £6.9m. However, the group noted that consolidated gross margin was stable at 21.5%.
Kitwave also highlighted that investment in the business had continued ahead of future potential growth opportunities, with operational and financial benefits expected to be realised from the second half of the year onwards.
Chief Executive Ben Maxted commented: “The group has made positive progress towards its strategic targets during H1 2024 with a series of important investments that will benefit the group in the long term.
“The continuation of our acquisition strategy saw Wilds and Total Foodservice brought into the group, growing our presence in the foodservice sector in the North. Their integration into the group has gone well and workstreams to further integrate the enlarged Northern Foodservice operation have commenced.
“The construction of our new foodservice distribution site in the Southwest is close to completion, which will both add capacity and further efficiencies as we consolidate three existing depots. Ahead of the completion of the new site, WestCountry has successfully migrated onto the group’s ERP system to enable a smooth integration of the businesses.
“As noted in the pre-close trading update, operating profit for H1 2024 is slightly behind the prior year due to investment and lower levels of demand in the group’s Foodservice hospitality customer base. This, alongside the benefits of the increased investment in infrastructure and the inclusion of trade from Total Foodservice in H2 2024 will lead to the company’s annual financial performance having an increased second-half weighting.
“Despite the slight shortfall in operating profit in H1 2024 and the continued wet weather in May and early June, we expect to be in line with market expectations for the full year ending 31 October 2024.”
