Kitwave Group plc (AIM: KITW), the independent, delivered wholesale business, has announced its financial results for the six months ended 30 April 2021. The results cover a financial period prior to the flotation of the Company on 24 May 2021.
During the six months being reported the Group traded in line with the Board’s expectations. The results were impacted by COVID-19 lockdown restrictions and, in particular, closures within the leisure and hospitality sector. Since April 2021, trading has returned close to pre-pandemic levels and the Directors are pleased to confirm the Group is currently trading in line with market expectations.
Financial summary
- Revenues of £147.1 million (12 months ended 30 April 2020: £399.0 million).
- Operating profit of £0.8 million (12 months ended 30 April 2020: £7.6 million).
- £9.8 million cash generated from operations (12 months ended 30 April 2020: £29.1 million).
The Board has declared an interim dividend of 2.25 pence per share to be paid on 27 August 2021 to shareholders on the register at the close of business on 6 August 2021. The ex-dividend date will be 5 August 2021.
Post-period end
- Significantly over-subscribed Placing and Admission to AIM on 24 May 2021, raising gross proceeds of £64.0 million for the Company and £17.6 million for the Selling Shareholders.
- Gross proceeds for the Company will be used to support the Group’s successful buy-and-build strategy, enhance the profile of the Group and its brands, improve Kitwave’s position with key suppliers, strengthen the Group’s balance sheet, and provide the Group with greater ability to incentivise and retain key employees going forward.
- On Admission, Stephen (“Steve”) Smith, Independent Non-executive Chairman, and Gerard Murray, Independent Non-executive Director, were appointed to the Board.
- Trading during June and July 2021 has been strong as a result of a period of warmer weather and consumer interest in the UEFA European Championship driving sales, as well as the leisure and hospitality sectors reopening further as nationwide COVID-19 lockdown restrictions have eased.
Operational highlights
- The Group opened a new 70,000 sq. ft distribution centre in Luton. The centre was delivered on time and on budget and specifically commissioned to cater for Frozen & Chilled product operations. The ability to store in excess of 5,000 pallets in highly efficient cold store conditions will ensure that the Group is well placed to meet future growth expectations and peak summer demands of Kitwave’s independent customers.
Paul Young, Chief Executive Officer of Kitwave, commented:
“I am pleased to report the Group’s financial results for the six months ended 30 April 2021, marking the first set of results to be reported since Kitwave’s successful Admission to trading on AIM in May 2021.
“All of the Group’s divisions have experienced some level of impact from the stop-start nature of COVID-19 restrictions during the period. Supply to pubs, restaurants and vending machine operators was severely disrupted as these businesses were either closed or operating under constraints. In contrast, our Frozen & Chilled division was extremely resilient and operated close to pre-COVID-19 levels throughout the period.
“Since mid-May 2021, COVID-19 lockdown restrictions have been eased and trade has accelerated. Thanks to a period of warmer weather and consumer interest in the Euros, we are already experiencing sales volumes that are moving toward pre-pandemic levels; this was the case even before the highly anticipated 19 July 2021 ‘Freedom Day’. As such, we remain confident that the Group is on track to achieve its full year expectations. This belief is further supported by the timing of the return to normal, as it allows the Group to take full advantage of the second half of our financial year, when trading is traditionally stronger due to the seasonality of the Frozen & Chilled division.
“The Board anticipates a buoyant market to return once COVID-19 lockdown restrictions are removed fully and has confidence that the Group will continue to be one of the leading independent delivered wholesale providers in the UK. The UK grocery and foodservice wholesale market remains highly fragmented and the Directors believe this presents Kitwave with numerous additional growth opportunities.”
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