Wholesaler Kitwave has announced it will join the London Stock Exchange in a move valuing the company at £105m.
The group raised £82m in the IPO, attracting “strong” support from “high-quality” institutional investors, with the placing of its shares “significantly” oversubscribed.
Kitwave has sold almost 43 million new ordinary shares, as well as almost 12 million existing shares held by existing investors and management, priced at 150p each.
Founded in 1987 following the acquisition of a single-site confectionery wholesale business in Tyne and Wear, Kitwave today employs 1,100 staff across a network of 26 depots thanks to a buy-and-build strategy that has seen it acquire ten wholesale businesses since 2011.
Revenues reached almost £400m in the 12 months to 30 April 2020, with adjusted EBITDA of £17.5m.
The company plans to use the proceeds of the placing to reduce its £76m of existing debt, as well as fuelling further acquisitions.
Chief executive Paul Young said the support of the new investors was “a highly positive endorsement” of Kitwave’s strategy to grow and capitalise upon the delivered wholesale market.
“To date, we have executed a highly successful buy-and-build strategy, having acquired and integrated ten wholesale distributors into the group since 2011, and we are confident that trading on AIM will enable us to continue to support this strategy,” he added.
“Furthermore, the directors believe that admission will enhance the profile of the group and its brands, improve Kitwave’s position with key suppliers, strengthen the group’s balance sheet, and provide the group with greater ability to incentivise and retain key employees going forward.
Kitwave specialises in selling impulse products, such as confectionery, soft drinks, snacks, ice cream, as well as frozen and chilled foods, alcohol, groceries and tobacco to approximately 38,000, mainly independent, customers.
Currently, the group sells a broad portfolio of approximately 33,000 ambient, frozen and chilled SKUs to a broad range of convenience retailers, leisure outlets, vending machine operators, foodservice providers and other wholesalers, as well as national retailers.
“Kitwave has worked hard to build its reputation as a trusted brand ambassador and provide the excellent levels of service that we pride ourselves on,” Young said.
“We are confident that admission to AIM will enable us to further improve our services to existing and prospective customers across the UK and globally.
“We look forward to an exciting future as a public company and generating shareholder value.”
Kitwave is set to start trading on London’s junior AIM market on 24 May under the ticker ‘KITW’, with 70 million shares in issue and a free float of around 52%.
The directors and senior management of the company will continue to hold 22% of the issued ordinary shares.
Shoppers have started to return to the high street as Covid restrictions eased and non-essential stores reopened, although numbers are still way down on before the pandemic hit, according to new figures for April.
Total UK footfall declined by 40% in April when compared with the same month in 2019, the latest BRC-Sensormatic IQ data showed.
However, this represented a 28.7 percentage point improvement from March when lockdown was more fully in place.
Footfall on high streets fell by 43.9% versus two years ago, while retail parks saw shopper numbers decrease 30.5% and shopping centres were down 49.8%.
Northern Ireland registered the steepest footfall decline of all nations at -55.4%, followed by Scotland at -52.1% and England at -38.4. Wales saw the shallowest decline of the UK’s nations at -38.2%.
BRC chief executive Helen Dickinson said, despite the positive uptick, it was unlikely there would a return to pre-pandemic levels of footfall anytime soon thanks to ongoing social distancing measures restricting shop capacity.
“Retail parks continued to fare better than shopping centres and high streets, as they benefit from the presence of large stores, more space and on-site parking,” she added.
“However, it was encouraging to see footfall improve across all retail sites compared to the lockdown months.
“Growing consumer demand and footfall in the months ahead will be vital for the survival of many retailers, as they start to see costs increasing as stores reopen and colleagues return from furlough. With full business rates relief ending in England in June, the ongoing rates review needs to deliver on its objectives to reform the broken rates system and reduce the financial pressures on retailers, otherwise many stores and viable jobs will be under threat.”
Elsewhere on thegrocer.co.uk this morning, there are details of record profits at Waitrose revealed by newly filed accounts.
It comes after sales boomed at the supermarket during a period in which it benefited from controversial government business rates relief.
The FTSE 100 continued its march higher this morning, opening up 0.3% to 7,100/12pts.
Early risers include Virgin Wines, SSP Group and Compass Group, while McBride, Glanbia and Deliveroo are among the fallers.
Yesterday in the City
The FTSE 100 continued its forward momentum yesterday, climbing another 0.4% to 7,067.51pts.
AB InBev shares jumped 4.7% to €61.42 in European markets after the brewing giant announced Michel Doukeris would take over from longstanding CEO Carlos Brito.
Virgin Wine fell back by 0.2% to 238p despite an update reporting the strong customer demand from last year has carried forward into 2021. Investors continue to be unsure of whether DTC players can continue to maintain growth once Covid restrictions end completely. Virgin Wines is still well ahead of its 197p flotation price.
Shares in Glanbia soared 7.7% to €13.60 after it reported a strong start to 2021 and guided it would hit the upper end of its forecasts for the year.
Elsewhere, tobacco firms Imperial Brands and British American Tobacco jumped 3.1% to 1,585.5p and 2.9% to 2,795p respectively. Other climbers included AG Barr, Associated British Foods and B&M European Value Retail.
Hotel Chocolat Group, Naked Wines and Hellofresh were among yesterday’s losers, falling 6.6% to 348.9p, 5.4% to 799p and 5.7% to €63.18 respectively.