Wholesale group Kitwave says it is on track to meet expectations despite weak demand from the hospitality industry - one of its key markets.
The £600m turnover, Tyneside-based business said its foodservice division - which supplies everything from bakery to dairy goods - had been impacted in the late part of 2024. Trading in the division has since improved in the later part of the half year to the end of April, before Easter.
Meanwhile revenue was said to be robust across Kitwave's retail and wholesale operations - which supply sweets, alcohol and cigarettes, among other items, for convenience shops and vending operators. Analysts expect the group to book sales of £843.8m this year with Ebitda of £61.6m - up from sales of £663.7m and Ebitda of £45.2m last year.
Bosses hailed the performance of the group's most recent acquisition - Gloucestershire-based Creed Catering Supplies. Having bought the supplier in a £60m deal last September, Kitwave said its benefits - including new business opportunities and distribution efficiencies - will be felt over the next two years.
In the six months to the end of April, the group launched an 80,000 sqft foodservice distribution centre in the South West which it said had taken additional investment - above the level first planned - to "protect customer service during the transition". Kitwave said that despite the spending, its cost base was in line with expectations and includes the increased depreciation levels from fleet investment over recent periods.
Bosses are on the lookout for synergies and cost saving benefits to help against cost headwinds such as increases in the rate of Employers National Insurance contributions. Kitwave said that as with previous years, due to the seasonality of its business, performance is expected to be weighted towards the second half of the year.
Ben Maxted, chief executive officer of Kitwave, said: "It has been a good first half in terms of trading and operational performance, with the group on track to meet its full year expectations. The integration of Creed is progressing well, with the team working to maximise delivery efficiencies to be gained from our national network and, ultimately, using our expanded scale to benefit our independent customers.
"We remain focused on delivering value to our customers and shareholders, and we look forward to updating the market further when we release our half-year results."
