Kitwave Group PLC on Tuesday said it is eyeing opportunities to increase revenue as it reported a fall in interim profit amid higher costs, but announced a higher payout.
The North Shields, England-based food wholesaler said pretax profit fell 17% to £6.9 million in the six months to April 30, from £8.3 million a year prior.
Revenue grew 8.0% to £297.0 million from £275.0 million.
However, the cost of sales increased 8.2% to £233.2 million from £215.6 million. Administrative expenses increased 16% to £26.6 million from £23.0 million, while distribution expenses came in 6.4% higher at £27.9 million from £26.3 million.
Finance expenses increased 24% to £2.4 million from £2.0 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.’
Kitwave declared an interim dividend of 3.85 pence per share, up 2.7% from 3.75p a year prior.
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.’
Kitwave shares fell 6.3% to 315.00 pence each on Tuesday morning in London.
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