Tyneside wholesale retail group Kitwave says sales volumes are heading back to pre-pandemic levels after taking a major hit during the Covid-19 lockdowns.
The North Shields business, which floated on the AIM market on May 24, posted operating profit of £800,000 on revenues of £147.1m for the six months ended April 30 2021, saying its results were particularly impacted by closures within the leisure and hospitality sector.
Directors said the results were in line with expectations and that, since April, trading has returned close to pre-pandemic levels.
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A total of £9.8m in cash was generated from operations, compared to £29.1m for the 12 months ended April 30 2020.
As a result, the board has declared an interim dividend of 2.25p per share to be paid on August 27
During the period the group, which has a network of 26 depots, opened a new 70,000 sq ft distribution centre in Luton, which can store more than 5,000 pallets, to cater for frozen and chilled product operations.
The firm said the centre 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, said: “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.”
