Kitwave Group (KITW) H1 2025 earnings summary

Executive summary

• Achieved record H1 revenue of £376.2m, up 26.7% year-over-year, and record operating profit, driven by foodservice integration and operational efficiency initiatives.

• Adjusted operating profit rose 21.9% to £13.2m, but profit before tax declined to £5.8m due to higher costs and integration expenses.

• Integration of Creed, Westcountry, and Total Foodservice progressing well, with ERP migration on track and new South West distribution centre operational.

• Retail & Wholesale division outperformed expectations, while Foodservice faced softer demand in leisure and hospitality.

• Interim dividend increased by 4% to 4.00p per share, reflecting confidence in ongoing growth.

Financial highlights

• Gross margin improved to 22.6% (+1.1% vs H1 24); adjusted EBITDA reached £21.1m (H1 24: £15.9m); net cash from operations £19.6m (+£7.2m vs H1 24).

• Like-for-like revenue up 3.1%; basic EPS fell to 5.1p from 7.3p due to increased share capital and interest costs.

• Net debt at period end was £128.3m (including IFRS16 lease liabilities); leverage at 2.5x (1.7x ex-IFRS16); bank covenant leverage at 2.3x (1.5x ex-IFRS16).

• Profit before tax was £5.8m (H1 24: £6.9m), reflecting investment and integration costs.

• Adjusted basic EPS at 7.9p, down from 9.1p year-over-year.

Outlook and guidance

• FY25 adjusted operating profit expected in the range of £38.0m to £40.5m, revised down due to cost pressures and softer volumes.

• Near-term softness in foodservice sector due to reduced customer spend in leisure outlets; long-term growth strategy remains intact.

• Employer National Insurance increases will add £1.8m in FY25 and £2.7m in FY26 to costs.

• No further acquisitions expected in the remainder of FY25.

• Targeting record year in revenue and profitability, subject to summer trading conditions.