Trading Update and Board Appointment
26 November 2021
Kitwave Group plc
("Kitwave", the "Group" or the "Company")
Trading Update and Board Appointment
Kitwave Group plc (AIM: KITW), the independent, delivered wholesale business, today announces a pre-close trading update for the year ended 31 October 2021.
Following the easing of COVID-19 restrictions and the return to stronger trading in the second half of the year, as is usual with the seasonal nature of the business, the Board is pleased to confirm the Group traded ahead of revenue expectations in H2, with volumes in most business segments returning to pre-pandemic levels. This has resulted in adjusted operating profit being significantly ahead of expectations which had been cautious due to the timing uncertainty of COVID-19 restrictions being lifted.
While many of the Group's industry peers have been impacted by HGV driver issues, Kitwave's in-house established fleet of c. 400 delivery vehicles and drivers means the Group is not dependent on third party logistics providers and enabled operations to continue as normal. 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.
Over the last few months the Group has seen the first signs of inflation in its cost base. Through the key initiatives outlined below and the recognition of elements of these costs in customer pricing, the Board does 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.
Work is progressing on the Group's new warehouse in Wakefield, which will ensure the Group is well placed to meet future growth expectations in its foodservice division. The warehouse is expected to open in Q1 2022.
In line with the Company's strategy to drive growth organically as well as through acquisition, management continues to focus on implementing key initiatives, with the development of cross selling opportunities and strengthening the market perception of the Group's brands underway.
The Group's balance sheet and liquidity remain strong and provide the Group with the opportunity to continue to both grow organically and capitalise on the fragmented nature of the UK grocery and foodservice wholesale market through the acquisition of smaller regional competitors.
The Group is also pleased to announce the appointment of Ben Maxted, Group Operations Director, Head of the Frozen and Chilled division, to the Kitwave Board as Chief Operating Officer with immediate effect.
Ben joined the Group in 2011 as the divisional Finance Director of the Automatic Retailing operation, a role which he held for three years before his appointment as Managing Director of Eden Farm, following its acquisition by the Group in 2014. Ben is a Chartered Accountant, having trained at PricewaterhouseCoopers, where he spent three years in their Corporate Finance division. Further information in relation to Ben's appointment is detailed below.
Paul Young, Chief Executive Officer of Kitwave, commented:
"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. As a result, the Group expects to report a profit before tax for the year to 31 October 2021 that is significantly ahead of expectations.
"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. 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.
"On behalf of the Directors, I would also like to welcome Ben to the Board. Ben has made a valuable contribution to the Group since joining in 2011 and we look forward to having the benefit of his strong operational and commercial expertise on the Board as Kitwave pursues the next phase of its growth.
"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."
Pursuant to Schedule 2(g) of the AIM Rules, the Company discloses the following details in relation to Mr Maxted's appointment:
Mr Benjamin John Maxted, aged 37, holds and has previously held the following directorships within the last 5 years:
Former Directorships (in the last 5 years)
Alpine Fine Foods Limited
Central Supplies (Brierley Hill) Ltd
The Morpeth Golf Club Limited
Eden Farm Limited
David Miller Frozen Foods Limited
Mas Frozen Foods Limited
Phoenix Fine Foods Limited
Eden Farms (Frozen Foods) Limited
Frozone Foods Limited
Hulley's (Frozen Confectionery) Limited
Companies that went into liquidation or administration whilst Ben Maxted was a director:
Do Well Recycling Limited appointed voluntary liquidators on 16 January 2012 and was dissolved on 3 April 2014.
There is no further information to be disclosed in relation to Ben Maxted's appointment pursuant to AIM Rule 17 or paragraph (g) of Schedule Two of the AIM Rules for Companies.
For further information please contact:
Kitwave Group plc
Paul Young, Chief Executive Officer
David Brind, Chief Financial Officer
Tel: +44 (0) 191 259 2277
Canaccord Genuity Limited
Alex Aylen - Sales
Tel: +44 (0) 20 7523 8150
Yellow Jersey PR
Tel: +44 (0) 20 3004 9512
Founded in 1987, following the acquisition of a single-site confectionery wholesale business based in North Shields, United Kingdom, Kitwave is an independent, delivered wholesale business, specialising in selling and delivering impulse products, frozen and chilled foods, alcohol, groceries and tobacco to approximately 38,000, mainly independent, customers.
With a network of 26 depots, Kitwave is able to support delivery throughout the UK to a diverse customer base, which includes independent convenience retailers, leisure outlets, vending machine operators, foodservice providers and other wholesalers, as well as leading national retailers.
The Group's growth to date has been achieved both organically and through a strategy of acquiring smaller, predominantly family-owned, complementary businesses in the fragmented UK grocery and foodservice wholesale market.
Kitwave Group plc (AIM: KITW) was admitted to trading on AIM of the London Stock Exchange on 24 May 2021.
For further information, please visit www.kitwave.co.uk.