Midwich Group has reported double-digit growth in adjusted profit before tax for the first half of 2026, as strong performances in the UK, US and Iberia helped the distributor return to overall revenue growth despite challenging conditions in several markets.
Revenue for the six months ended 30 June increased 3.2 per cent year on year to £640.3m, or 2.4 per cent at constant currency, compared with £620.3m in H1 2025. Adjusted profit before tax rose 10.3 per cent to £10.6m, while adjusted operating profit increased 2.4 per cent to £17m.
On a statutory basis, operating profit more than doubled from £4.7m to £10.3m, with Midwich returning to a pre-tax profit of £4.3m compared with a £3m loss in the same period last year.
The distributor said double-digit growth in the UK, US and Iberia drove its return to growth, with expansion of its unified communications business a key contributor. This performance more than offset declines in the Middle East, Germany and Canada.
Chief executive Stephen Fenby said sales of UC products had been particularly strong in the UK and US. “In the first half of 2026, the Group made good progress in a number of markets, including the UK, US and Iberia,” he said. “In the first two markets, sales of UC products saw particularly strong growth.”
Trading in the Middle East was significantly affected by the conflict in Iran, although Midwich said its business in the region remained profitable despite substantially lower volumes. Germany also continued to prove challenging, with the group undertaking a number of growth and efficiency initiatives.
“As expected, the conflict in Iran has had a significant impact on our business in the Middle East,” said Fenby. “However, the local team has worked tirelessly to pivot the business towards the stronger segments in the market and as a result, the Middle East remained profitable in the period.”
Gross profit increased 1.4 per cent to £111.1m, although gross margin slipped from 17.7 per cent to 17.4 per cent. Adjusted operating margin remained unchanged at 2.7 per cent. Excluding the Middle East and businesses that Midwich has exited, adjusted profit before tax increased by around 20 per cent during the period.
Adjusted earnings per share rose 13.7 per cent to 7.86p, while the group increased its interim dividend by 8.6 per cent to 1.9p per share. Adjusted net debt stood at £138.1m at the end of June, down from £148.2m a year earlier.
Midwich also highlighted progress in its technology strategy during the half, including upgraded e-commerce platforms and the introduction of AI-driven automation and productivity tools.
The group has reorganised its operations into three reporting segments: UK, Ireland, Australia and New Zealand (UKIANZ); Continental Europe, Middle East and South East Asia (EMESEA); and North America.
Looking ahead, Midwich said it had made a solid start to the second half and maintained its full-year profit expectations despite a mixed market backdrop and continuing volatility in the Middle East.
The group expects market conditions to remain challenging for the remainder of 2026, but said it sees a range of potential growth opportunities. Management has also become more active in pursuing relatively small acquisition opportunities.
“The Group’s long-term focus remains on higher margin, more specialist product areas and we continue to both target and exploit new growth opportunities, as well as retaining a tight focus on overhead efficiencies,” concluded Fenby. “Midwich remains well positioned for the remainder of the year with the Group expecting to continue to deliver both organic and inorganic growth in the longer term.”
