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Highlights

  • Analysts maintain a BUY rating with a current target price of GBp 453.25, indicating an 84.25% upside.

  • H1 FY25 revenue increased 26.7% YoY to £376.2 million with operating cash flow.

  • Adjusted operating profit guidance for FY25 revised to £38–£40.5 million due to macroeconomic headwinds.

Kitwave Group plc (LSE:KITW), a wholesale food and drink distributor in the UK, continues to attract bullish sentiment from analysts, with a consolidated BUY recommendation and an average target price of GBp 453.25. This represents an implied upside of 84.25% from the current share price of GBp 246, even after a sharp intraday decline of over 23%.

Analysts from Investec Bank, Stifel Europe, and Canaccord Genuity have all reiterated positive recommendations, with price targets ranging from GBp 420 to GBp 488. The sentiment is supported by interim results and continued operational integration of recent acquisitions, which are expected to yield efficiency gains over the medium term.

H1 FY25 Results Provide Foundation for Growth

In its unaudited interim results for the six months ended 30 April 2025, Kitwave reported revenue of £376.2 million—up 26.7% from the prior year. On a like-for-like basis, revenue growth stood at 3.1%, and gross margin improved to 22.6% from 21.5% in H1 2024.

Adjusted operating profit rose by 21.9% to £13.2 million, while cash generated from operations increased to £19.6 million. The group’s operational cash conversion reached 106%, reflecting financial discipline and earnings quality. Leverage also reduced to 2.3 times on a bank covenant basis, highlighting the company’s improving balance sheet.

Kitwave declared an increased interim dividend of 4.00 pence per share, up from 3.85 pence a year ago, to be paid on 31 July 2025.

Integration and Infrastructure Expansion on Track

Operational progress continues across key areas. The integration of Creed Foodservice is ahead of schedule, with the full benefits expected over the next two years. Similarly, the merger of Total Foodservice and Miller Foodservice is progressing and slated for completion by year-end.

The new South West distribution centre is now operational, though it has incurred higher-than-anticipated transitional costs. 

Revised Outlook Amid External Pressures

Despite the interim performance, the company has revised its full-year outlook due to macroeconomic headwinds. Increased employer National Insurance contributions, lower-than-expected consumption in the tourism foodservice segment, and sustained investment in new infrastructure have led management to adjust FY25 operating profit expectations.

The company now forecasts adjusted operating profit in the range of £38 million to £40.5 million for FY25.