Kitwave, a prominent wholesale group based in North Shields, reports a robust summer, effectively aligning with its full-year performance goals.
After an initial slowdown attributed to adverse weather, the group witnessed significant customer demand from May onwards, endorsing the successful impact of its early-year investments.
Investment in Technological Advancements
Kitwave’s strategic investments, particularly in voice-picking technology at its Northern ambient hub, have enabled the company to streamline its operations and enhance efficiency. This investment is a testament to the group’s commitment to integrating advanced technological solutions to meet growing customer demands and elevate operational performance.
The introduction of this technology has not only optimized the order fulfillment process but also contributed to a measurable increase in customer satisfaction, demonstrating the tangible benefits of Kitwave’s forward-thinking approach.
Ben Maxted, CEO of Kitwave, stated that these investments underline the company’s dedication to achieving its growth objectives and maintaining a competitive edge in the market.
Impact of Acquisitions
Acquisitions have played a pivotal role in Kitwave’s recent success. Notable acquisitions such as Wilds of Oldham and Total Foodservice Solutions have expanded the company’s market presence and service offerings.
These acquisitions have allowed Kitwave to tap into new markets, broadening its customer base and ensuring a more diversified revenue stream, which has been instrumental in weathering periods of economic uncertainty.
Further consolidation with these entities has bolstered Kitwave’s operational capabilities, significantly enhancing its competitive position within the industry.
Expansion into Foodservice Distribution
The completion of an 80,000 sqft foodservice distribution facility in the South West marks a significant milestone for Kitwave. This development will consolidate three existing sites, elevating operational efficiency.
Expected to be operational by October, this facility aligns with Kitwave’s strategy to support its WestCountry and M.J. Baker businesses.
The strategic location of this facility not only optimizes logistic networks but also reduces operational costs, thereby boosting profitability and ensuring timely delivery services to customers.
Financial Performance Overview
Despite initial setbacks due to adverse weather conditions, Kitwave’s revenue showed resilience with an 8% increase to £297 million in the first half of 2024. The group’s ability to adapt and optimize resources played a crucial role.
However, operating profits witnessed a decrease, falling from £10.2 million to £9.3 million. This decline was attributed to reduced operating margins, which fell from 3.7% to 3.1%.
Foodservice and Retail Divisions
The foodservice division, a cornerstone of Kitwave’s operations, recorded a substantial revenue increase of over 15%, reaching £93 million.
Conversely, the retail and wholesale division also experienced growth, with revenues escalating from £194 million to £204 million, reflecting the adaptability and resilience of Kitwave’s business strategy.
Adjusted operating profits for the retail and wholesale division rose to £7.3 million, indicating successful strategic execution.
Management’s Perspective on Growth
Ben Maxted emphasised the importance of continued growth and innovation. He affirmed the company’s strategic focus on integrating acquisitions and operational investments to align with market expectations.
The management remains optimistic about future growth prospects, underscoring the significance of operational investments in strengthening the company’s market standing.
Kitwave’s strategic initiatives are anticipated to propel the group towards achieving expected financial outcomes, as conveyed by Maxted.
Market Challenges and Customer Demand
The wetter than usual start to the year presented challenges, yet Kitwave noted that customer demand remained strong, albeit with some fluctuations.
Kitwave’s informed strategic investments and effective management of acquisitions have positioned the company favourably for future growth.
The company’s resilience in overcoming early-year challenges has set a strong foundation for sustained success.
