Kitwave Group (KITW) H2 2024 earnings summary

Executive summary

• Achieved full-year results in line with market expectations despite challenging weather, inflationary pressures, and increased costs, with revenue up 10.2% year-over-year and gross margin improving to 22.3%.

• Significant investment in operations, infrastructure, and technology, including ERP migration, AI, RPA, and voice-picking systems.

• Three major acquisitions (Wilds, Total, Creed) expanded distribution scale and product offering, with Creed pending ERP integration.

• Final proposed dividend of 7.45p per share, total dividend up 1% to 11.30p per share compared to FY23.

• Focused on driving operational efficiencies and leveraging technology for future growth.

Financial highlights

• Group revenue reached £663.7m, up just over 10% year-over-year; like-for-like revenue increased 5%.

• Gross margin improved by 0.4% to 22.3%; adjusted operating profit rose by £2 million to £34 million.

• Adjusted EBITDA increased to £45.2m; adjusted operating profit margin at 5.1%.

• Cash generated from operations totaled £31.4 million; pre-tax operational cash conversion at 90%.

• Profit before tax was £22.5m, down from £24.9m in FY23, reflecting increased investment and acquisition costs.

Outlook and guidance

• FY 2025 focus on integrating Creed, leveraging synergies, and further ERP integration, with M&A activity expected to resume in FY 2026.

• Organic growth prioritized, with continued investment in operational efficiency and technology.

• Cautiously optimistic outlook, with positive momentum in customer base and good trading visibility.

• Pipeline of further acquisitions identified, with a repeatable strategy and integration blueprint.