Shares of North Shields-based wholesaler Kitwave Group fell 12% after it published results for the six months ended April 30, 2024, showing revenues up 8% to £297 million but operating profit slightly behind the prior year “due to investment and lower levels of demand in the group’s Foodservice hospitality customer base.”

Operating profit fell to £9.3 million from £10.2 million.

An increased interim dividend of 3.85p per share (H1 2023: 3.75 pence per share) has been declared.

Kitwave CEO Ben Maxted said: “The group has made positive progress towards its strategic targets during H1 2024 with a series of important investments that will benefit the group in the long term.

“The continuation of our acquisition strategy saw Wilds and Total Foodservice brought into the group, growing our presence in the Foodservice sector in the North.

“Their integration into the group has gone well and workstreams to further integrate the enlarged Northern Foodservice operation have commenced.

“The construction of our new Foodservice distribution site in the Southwest is close to completion, which will both add capacity and further efficiencies as we consolidate three existing depots.

“Ahead of the completion of the new site, WestCountry has successfully migrated onto the Group’s ERP system to enable a smooth integration of the businesses.

“As noted in the pre-close trading update, operating profit for H1 2024 is slightly behind the prior year due to investment and lower levels of demand in the group’s Foodservice hospitality customer base. This, alongside the benefits of the increased investment in infrastructure and the inclusion of trade from Total Foodservice in H2 2024 will lead to the Company’s annual financial performance having an increased second-half weighting.

 “Despite the slight shortfall in operating profit in H1 2024 and the continued wet weather in May and early June, we expect to be in line with market expectations for the full year ending 31 October 2024.”