Kitwave has this morning upgraded profit expectations as trading recovered to pre-pandemic levels and the wholesaler escaped the worst of the HGV driver crisis.
Revenues raced past forecasts in the second half of the year ended 31 October, with volumes in most business segments returning to 2019 levels, the group said in a pre-close trading update.
As a result, adjusted operating profits are “significantly” ahead of expectations, which had been cautious while awaiting the lifting of Covid restrictions.
Kitwave added its in-house fleet of about 400 delivery vehicles and drivers had insulated the group from the problems hitting rivals in the industry.
“The strong relationships with the group’s large network of brand suppliers has ensured supply chain issues have been kept to a minimum with substitute products available and high customer service levels maintained,” the statement said.
The first signs of inflation have crept into the business’ cost base in the past few months, but the board said it did not expect profitability to be adversely affected.
“This is not a new phenomenon and one with which the Group has dealt with successfully on many occasions in its 35-year history,” the wholesaler added.
Kitwave also announced the appointment of Ben Maxted, group operations director and head of the frozen and chilled division, to its board as chief operating officer with immediate effect.
Maxted joined the group in 2011 as finance director of the automatic retailing division. He was subsequently made MD of frozen food wholesaler Eden Farm when Kitwave acquired the business in 2014.
“I am pleased to report strong trading in the second half of the year, not only driven by the seasonal nature of our business but also due to the easing of Covid-19 restrictions,” said Kitwave CEO Paul Young.
“As we enter the new financial year, the outlook for the group remains positive. Assuming no further national lockdowns or disruptions to the leisure and hospitality sectors, trading in the foodservice division should continue to recover and we expect will return to or exceed pre-pandemic levels.”
Shares in Kitwave have escaped the carnage affecting the markets today on fears of a new Covid variant, with the stock up 1.8% so far to 144.5p.
However the value remains below the IPO price of 150p when the group floated in May.
“Initiatives are in the process of being implemented to drive organic growth throughout the group, while the board continues to review opportunities for acquisition that fit with its search criteria,” Young added.
“We are highly encouraged by the performance of the group in the period since the IPO and look forward to keeping the market updated on our progress.”
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