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(Sharecast News) - Wholesaler Kitwave Group said on Friday that it expects to report full-year pre-tax profits "significantly ahead" of expectations.
Kitwave stated that its expected outperformance came following the easing of Covid-19 restrictions and a return to stronger trading in the second half of the year.
As a result, Kitwave confirmed that it had traded ahead of revenue expectations in the second half, with volumes in most business segments returning to pre-pandemic levels, resulting in adjusted operating profits smashing cautious guidance put in place due to the uncertainty of when Covid-19 restrictions would being lifted.
The AIM-listed firm noted that while several of its industry peers had been impacted by HGV driver issues, its in-house fleet of roughly 400 delivery vehicles and drivers meant that it was not dependent on third-party logistics providers and enabled operations to continue as normal.
Kitwave also noted that over the last few months it had seen "the first signs of inflation in its cost base" but stated it does not expect profitability to be adversely affected.
Chief executive Paul Young said: "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 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."
Separately, Kitwave announce that Ben Maxted had been appointed to the board as chief operating officer, with immediate effect.
As of 0920 GMT, Kitwave shares were 1.08% higher at 143.53p.
12 Dec 2022 14:27
Kitwave buys fresh-food retailer WestCountry Food for GBP29 million
Kitwave Group PLC - North Shields, England-based food wholesaler - Buys 166 year-old local, regional and imported fresh food retailer WestCountry Food Holdings Ltd for GBP29.0 million. Kitwave says that the acquisition has been funded via current banking facilities and a new three-year revolving credit facility provided by its banking partners. WestCountry reported pretax profit of GBP3.9 million and revenue of GBP29.7 million in 2021. Kitwave CEO Paul Young says: "The acquisition of WestCountry enables us to expand our product range to include high-quality fresh produce and complements our existing foodservice offering in the South West, following the acquisition of MJ Baker earlier in 2022." Kitwave bought Devon-based MJ Baker Foodservice Ltd in February for GBP24.5 million, which it said would be immediately earnings enhancing.
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