Grocery wholesaler Blueheath commenced trading on AIM after placing 15.3m shares at 121p per share. The company, whose market capitalisation following the placing is £49.7m, is aiming to take a large chunk of the £7bn market in delivered wholesaling to the convenience store sector by offering next-day deliveries across the UK from a single central warehouse. Its proprietary IT system enables the company to operate on four days stockholding and deliver orders with 98% fulfillment accuracy, ahead of the industry norm. Blueheath currently has approximately 1,000 independent customers, but it is also winning business from mid-sized chains such as wine retailer Oddbins, petrol station operator Texaco and leisure group Vue Cinemas. Founded three years ago, revenues grew to £63m by February and pre-tax and pre-interest losses were £6.6m. House broker Evolution Beeson Gregory anticipates the losses will be halved in 2005 and an operating profit of £2.3m will be produced by 2006. Management is a strong feature of this young company: the chief executive is Douglas Gurr, the ex-head of retail practice at management consultant firm McKinsey; the non-executive chairman, Colin Smith, was chief exec of Safeway from 1993-99; and finance director Simon Mindham was previously with wholesaling group Cert Distributors. The £18.5m raised will be used to enable the group to expand and offer chilled foods. An interesting punt for speculators.

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