Huge revenue, profit growth for wholesaler Kitwave as boss Paul Young steps down

Kitwave Group, the delivered wholesale business, has reported strong growth in its revenue and profit for its 2023 fiscal.

In the year ended on 31 October 2023, the group’s revenue increased by 20 per cent to £602.2 million. Pre-tax profit jumped by 40 per cent to £24.9m, as gross profit margin increased by two percentage points to 22 per cent during the year.  

The group said all its divisions have continued to grow while managing well the inflationary pressures in their cost base that existed throughout the year.

“As announced in the group’s trading update in November 2023, the strong performance continues to deliver growth with sustained momentum achieved throughout FY23,” Paul Young, who will be retiring as chief executive after the annual general body meeting next month, said.

“We are, therefore, able to report results in line with the significantly upgraded market expectations that were established after the group’s interim results, published in July 2023.

Ben Maxted, the current chief operating officer, will be heading the business as new chief executive following the departure of Young, who co-founded the group in 1987 as a single North East based cash and carry.

During his 30 year tenure as chief executive, and majority shareholder, he has grown the business into a 18 national delivered wholesale business.

“Finally, after over 35 years since Kitwave was founded and being a part of that process, I will be retiring after the AGM on 22 March 2024. It has been a pleasure to see the group grow and with Ben Maxted taking over as the new chief executive officer, I am confident that the board and management have the expertise and experience to deliver Kitwave’s growth strategy and generate further value for the Group and its shareholders,” Young commented.

“I would like to take this opportunity to acknowledge and thank everyone within the group. I am extremely grateful for my tenure as chief executive officer and I wish Kitwave every success for the future.”

During the year, Kitwave has successfully integrated Westcountry Food Holdings Limited, a specialised fresh produce wholesaler acquired in December 2022, and Wilds of Oldham, a composite family-run drinks wholesaler, into its foodservice division.

The group has also commenced construction of the new 80,000 sq. ft distribution centre to fully integrate the group’s South West operations, with completion scheduled for Autumn 2024.

“The successful integration of WestCountry into the foodservice division demonstrates the value of our buy-and-build philosophy, with the group continually assessing acquisition opportunities to combine with our initiatives to drive organic growth,” Young said.

The group has now acquired and successfully integrated 13 businesses since 2011, and Young said the business is keen to continue on this path.

“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 commented.

“In addition to acquisitions we also seek operational improvement. The new distribution centre is an example as it will be key to increasing the efficiency and capacity of the group’s South West operations.”

The group said the launch of a web-based trading platform in February 2022 has brought immediate success, with electronic ordering becoming the predominant source of order capture for the group at 47 per cent of all orders in the quarter to October 2023.

“The group is strategically positioned to continue to deliver a high service offering within the UK wholesale market and we are confident of another positive trading period in 2024,” Young added.

Kitwave has recommended a final dividend of 7.45 pence, which will take the total dividend for the financial year to 11.20 pence per share.