Kitwave Group PLC on Tuesday (2) reported a slight fall in its operating profit amid higher costs, saying it is eyeing opportunities to increase revenue.
The North Shields, England-based food wholesaler said pretax profit fell 17 per cent to £6.9 million in the six months to April 30, from £8.3 million a year prior. Revenue grew 8.0 per cent to £297.0 million from £275.0 million.
However, the cost of sales increased 8.2 per cent to £233.2 million from £215.6 million. Administrative expenses increased 16 per cent to £26.6 million from £23.0 million, while distribution expenses came in 6.4 per cent higher at £27.9 million from £26.3 million.
The company explained it had been affected by inflationary pressures, such as labour and delivery-based costs.
"We are continually striving to mitigate such cost increases and as a result, the ratio of distribution costs to revenue is slightly improved on the prior period," Kitwave said. "It is expected that these cost pressure increases will ease over time, as we anticipate lower levels of fuel pricing and lower wage inflation compared to the last 18 months."
Looking ahead, Chief Executive Officer Ben Maxted said, "We have built an excellent platform for growth within the UK wholesale market. With our focused growth strategy, both organic and through acquisitions, we believe that we continue to be well-placed to deliver value for the group and its shareholders."
He added, "The development of our distribution centre in the Southwest will help grow our delivery capability and widen our footprint in the region. With the planned completion in Q3 2024, we believe this will bring further opportunities to increase revenue and provide operating efficiencies in the Foodservice division once fully operational."
