The Kitwave Group’s revenues increased by 20% to £602.2m compared to £503.1m the previous year ending 31 October 2023, with the company confirming further foodservice M&A activity as a key growth area.
Speaking to Better Wholesaling, chief executive designate Ben Maxted explained that while foodservice makes up 30% of group revenues it’s already at 45% of group adjusted operation profit because of the higher margin structures. “Foodservice fits into our culture and story of being a service-led business. Strategically our stated M&A aim is towards foodservice moving forward, so you can see that becoming a more dominant part of the business in the future ahead of chilled, frozen and ambient,” said Maxted, who will be replacing the retiring Paul Young next month.
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“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,” he added. “Our next M&A target is not necessarily geographically based; the decision will be based on several factors including product offering and what fits our culture. Our focus will also be on independent foodservice, we’re not trying to scale into a national business to take on large contracts. Our niche is small drops, service-led quality that lends itself to smaller foodservice players, it doesn’t matter if we don’t have an outpost in a certain region because we’re not chasing national contracts.”
The financial results also show gross profit margin increasing by 22% and adjusted operating profit increasing by 49% to £32m, while profit before tax went up by 40% to £24.9m. Chief financial officer David Brind put this strong performance down to the acquisition of Westcountry Food Holdings, as well as the increase in online trading platforms, along with all divisions continuing to grow while managing the inflationary pressures in their cost base well throughout the year.
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Brind and Maxted also revealed construction has begun on a new 80,000 sq. ft distribution centre in Kingsteignton, Devon to fully integrate the group’s south west operations, with completion scheduled for Autumn 2024. He also confirmed that Wilds of Oldham has now been fully incorporated into the existing foodservice on-trade business, HB Clark.
