Wholesaler Kitwave makes takeover vow as taxes bite

A wholesaler has pledged to continue a takeover drive after chalking up record first-half revenues and operating profits – but warned tax rises and falling consumer confidence are set to hit performance.

Kitwave Group saw earnings jump 26.7 per cent to £376.2 million in the six months to April 30, with adjusted operating profit 21.9 per cent better off at £13.2 million.

However, the North Shields-based UK-wide operator says macroeconomic “volatility” and the impact of employer national insurance rises – predicted to cost an extra £1.8 million during its 2025 financial year – have reduced full-year adjusted operating profit expectations to between £38 million and £40.5 million.

But bosses say they remain committed to a takeover blueprint, which previously saw the business add Creed Foodservice, Yorkshire and Lancashire-based Total Foodservice Solutions and family-run drinks business Wilds of Oldham to its stable.

Analysing its half-year performance, chief executive Ben Maxted said the company had benefited from the “excellent” contribution of Creed Foodservice, and will continue its expansion model.

He said: “As a result of the increase in employer national insurance contributions and the macroeconomic backdrop detrimentally impacting consumer confidence and volumes in the destination leisure sector, the board now anticipates adjusted operating profit will be below current market expectations.

“(However), the acquisition of Creed Foodservice, alongside recent investments in infrastructure, has strengthened our position as a nationwide, delivered foodservice business with a clear and active pipeline of organic growth opportunities.

“The group has a strong balance sheet with a highly cash-generative business model.

“This financial strength provides the flexibility and resilience to continue pursuing our buy-and-build strategy, which we believe remains the right path forward in the current market landscape – albeit currently no acquisitions are expected during the remainder of the financial year.

“The fundamentals of our business remain strong.”

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