Kitwave boosts revenues by 20% and profit before tax by 40%

Kitwave Group, the delivered wholesale business, increased revenues by 20% to £602 million and profit before tax by 40% to £24.9 million in the 12 months ended 31 October 2023.

Paul Young: ‘We are confident of another positive trading period in 2024.’

Gross profit margin rose to 22% during the year, while adjusted operating profit increased by 49% to £32 million. There was £30.3 million net cash generated from operations in the same period.

In the past year, Kitwave commenced construction of a new 80,000 sq ft distribution centre to fully integrate the group’s South West operations, with completion scheduled for Autumn 2024. In addition, the company acquired Wilds of Oldham, a composite family-run drinks wholesaler, and incorporated it into the existing foodservice on-trade business, HB Clark, in November 2023.

CEO Paul Young, who will be replaced by the current chief operating officer Ben Maxted when he retires in March after 35 years with Kitwave, commented: “The strong performance continues to deliver growth with sustained momentum achieved throughout FY23. All our divisions have continued to grow while managing well the inflationary pressures in their cost base that existed throughout the year.

“The successful integration of WestCountry [acquired in December 2022] into the Foodservice division demonstrates the value of our buy-and-build philosophy, with the group continually assessing acquisition opportunities to combine with our initiatives to drive organic growth.

“While we have now acquired and successfully integrated 13 businesses since 2011, the board believes there remain a large number of opportunities available to us in what is a fragmented delivered wholesale market in the UK.

“In addition to acquisitions we also seek operational improvement. The new distribution centre is an example as it will be key to increasing the efficiency and capacity of the group’s South West operations.”

Young added: “The launch of a web-based trading platform in February 2022 has brought immediate success, with electronic ordering becoming the predominant source of order capture for the group at 47% of all orders in the quarter to October 2023. We recognise the importance of technology and will continue to invest to improve our operational capability.”

He concluded: “The group is strategically positioned to continue to deliver a high service offering within the UK wholesale market and we are confident of another positive trading period in 2024.”