Kitwave Group – tomorrow morning’s Interims should show just how well this group is progressing and that its shares, at 331p, are cheap, brokers TP 500p

30.06.2025

Tomorrow morning, Tuesday 1st July, will see the £276m-capitalised Kitwave Group (LON:KITW) report its First-Half results, they are sure to show that its shares, at 331p, are undervalued and capable of a rise of over 20% and then still looking cheap.

The Business 

Established way back in 1987, following the acquisition of a single-site confectionery wholesale business based in North Shields, Kitwave is a delivered wholesale business, specialising in selling and delivering impulse products, frozen, chilled and fresh foods, alcohol, groceries and tobacco to approximately 46,000, mainly independent, customers. 

The enlarged group has a network of 37 depots, enabling it to support delivery throughout the UK to its diverse customer base, which includes independent convenience retailers, leisure outlets, vending machine operators, foodservice providers and other wholesalers, as well as leading national retailers, while also offering wholesale commercial catering supplies.  

The company specialises in selling impulse products, frozen, chilled, and fresh foods, alcohol, and groceries.  

Its segments include Ambient, Frozen and Chilled, and Foodservice.  

The Ambient segment provides delivered wholesale of ambient food, drink, and tobacco products.  

The Frozen and Chilled segment provides delivered wholesale of frozen and chilled food products.  

The Foodservice segment provides delivered wholesale of alcohol, frozen, chilled, and fresh food to trade customers.  

The group’s product range includes branded lines, branded drinks, crisps and snacks, beers and wines, bottled waters, weigh outs, and tobacco, while specialising in the supply of ice cream, ice lollies, and convenience frozen food, as well as carrying a core range of branded beers and wines. 

Kitwave’s growth to date has been achieved both organically and through a strategy of acquiring smaller, predominantly family-owned, complementary businesses in the fragmented UK grocery and foodservice wholesale market. 

The Equity

There are some 80.44m shares in issue.

The larger holders include Threadneedle Asset Management (8.91%), Liontrust Investment Partners (6.61%), Ninety One UK (4.18%), BlackRock Investment Management (4.17%), Premier Fund Managers (4.16%), Canaccord Genuity Wealth (3.29%), Norges Bank Investment Management (2.75%), Trinity Bridge (2.44%), Royal London Asset Management (2.13%) and Harwood Capital (1.79%).

Analyst Views

There are five brokers following the group, all of whom rate the shares as a Buy.

The consensus average Target Price is 468p, the lowest is 25p, the highest being 500p.

Analyst Mark Photiades, at Canaccord Genuity Capital Markets, rates the group’s shares as a Buy, looking for a Target Price of 495p.

For the year to end-October 2025 he is estimating sales of £843.8m (£663.7m), helping to kick its adjusted pre-tax profits up to £35.5m (27.8m), with earnings of 32.5p (28.6p) per share, comfortably covering a dividend of 11.6p (11.3p).

For the coming 2026 year, he goes for £867.4m in sales, with £37.6m profits, earnings of 34.5p and a 12.4p dividend.

Jumping into 2027, the analyst looks for the group to push sales to £889.0m, with £39.4m profits, generating 36.1p earnings and paying out a 13.0p per share dividend.

The analyst considers that Kitwave’s valuation is too low given its strong cash generation, its robust balance sheet, while offering considerable further consolidation opportunities being made available.

Analyst Nigel Parson, at Cavendish Capital Markets, who has a Buy rating on the group’s shares, with a 430p Target Price, recently came out with a view on the US Tariffs, stating that he does not expect any notable impact on Kitwave’s business.

In My View

This feels to me to be a healthy business which is destined to grow and grow, both organically and through strategic acquisition.

Its shares, at 331p, offer attractive upside prospects.